Thursday, 29 May 2014


MP3EI stands for Indonesia’s Economic Development Expansion Masterplan, a term introduced by President SBY on the occasion of commemoration of the National Awakening Day on May 17, 2011 in the form of Presidential Regulation on May 17, 2011 dated May 20, 2011.

MP3EI was designed as strategic guideline for Indonesia’s economic development for a period of 15 years as per 2011 to 2025 within the framework National Long Term Development Plan and complement to planning document.

MP3EI stemmed from Government optimism in seeing Indonesia’s position in the eyes of the world. It was expected that this masterplan would elevate Indonesia to become 10 greatest country by 2025. This Government’s confidence was indeed not without reason.

As inclusive therein, MP3EI was schemed up by the Coordinating Minister of Economy by involving various shareholders from the Government or private sector. The objective was to integrate plan, so the masterplan would not overlap with other existing plans.

The vision of MP3EI was “to establish an Indonesian society which is independent, progressive, just and prosperous,” MP3EI was expected to uplift Indonesia into an advanced nation acknowledged by the world through inclusive and sustainable economic development.

Firstly, increase of added value, extention of production chain process, distribution of asset management and access to natural resources, geographic expanse, and human resources upgrading through integrated and synergic activities.

Secondly, to enhance production and marketing efficiency and intergration of the domestic market toward strengthening of national competitiveness and resilience.

Thirdly, to enhance innovation on the production side, i.e. processing and marketing for promoting sustainable global competitiveness toward innovation-driven economy.

In this case MP3EI stood on three pillars serving as main strategy in realizing Indonesia’s economic development and expansion.

One: development of economic potentials through economic corridor. Two: strengthening of national connectivity. Three: strengthening of Human Resources competence and national science and technology.

Broadly speaking, the strategic focus of MP3EI were among others: mapping out of economic growth center in six corridors [Java, Sumatra, Kalimantan, Sulawesi, Maluku-Papua, Bali-Nusa Tenggara]; strengthening of national connectivity. The vision was: locally integrated, globally connected, i.e. how to connect economic centers including remote regions to create effective value chain in Indonesia; upgrading of human resources quality toward mastery of science and technology.

Hench the objective of MP3EI was equal distribution and development of industry in the east and west Indonesia in accordance with local potentials. However, equal distribution of development was hard to attain if strategic industry was concentrated in Java only especially in Greater Jakarta which would remain to be a metropolitan city, while the regions outside Java  would have disparity in development so development of public facilities would remain to be focused in Jakarta.

An economic corridor was a region in the ter­ritiory of Republic of Indonesia which was an eco­nomic growth center with inter regional connectivity. The formation of economic corridors was essentially a combination of sectoral and regional approach. Ev­ery region developed products which were the their hero products.

The objective of development of econom­ic growth centers was to enhance the benefits of agglomeration, to tap regional potentials and to mini­mize spatial disparity in Indonesia's economic devel­opment. This was one of the 3 main strategy points.

Development of economic corridors was based on the potentials and plus points of each region spread out in all of Indonesia. As an archipelago of thousands of islands and located between two con­tinents and two oceans, the Indonesian artchipelago was a unique constellation and each of the island had its own strategic role which would serve as main pil­lar toward Indonesia vision 2025.

By considering various potentials and stra­tegic role of each island according to their strategic locations, the Masterplan stipulated six economic cor­ridors. The economic activities therein were based on the potential of each corridor to accelerate implemen­tation of the MP3EI Masterplan.

The projects included in the MP3EI were gen­erally of high investment value and had strong uplift­ing force to economy. In this case the Government of RI had planned to do groundbreaking of 166 MP3EI projects in this year 2014.

The total investment for 166 MP3EI projects this year was posted at Rp 628.9 trillion. The proj­ects consisted of 199 infra structure projects with total investment worth Rp 396 trillion. The infra struc­ture projects would still be led by the Government of which the Government commanded over 65 proj­ects, BUMN 25 projects and 29 other projects were private and mix project.

It was noteworthy that by 2014, most of the MP3EI projects being at groundbreaking stage were in the corridor of Sumatra [43 projects] with infra structure projects totaling 37. The Pakanbaru-Kandis­-Dumai tol section, and development of Tanjung-En­im-Lampung were 2 of the 37 infra structure proj­ects in the Sumatra corridor with total investment of Rp93.79 trillion.

All the MP3EI projects in the Sumatra corridor would bring multiplier effect to growth process and distribution of development in Sumatra. This was to play catch up for the Sumatra corridor against Java. As known, all through the year from 2010 to 2013 there were 365 MP3 Ei projects where groundbreak­ing had been executed.

The Java corridor was still the corridor with highest investment, as there were some projects run sooner like the Mass Rapid Transport [MRT] and development of the Soekarno Hatta airport. Data of Bappenas showed realization of grounbreaking for MP3 El projects in Java corridor through 2011- 2013 including 99 corridors with total investment of Rp 296.34 trillion.

Naturally, the present Government still had to work hard to accomplish their task before being succeeded by the next Government this October. As known, so far development realization of some infra­structure projects proclaimed in MP3EI had not been on schedule due to various obstacles.

In all the development corridors: Sumatra, Java, Bali and Nusa Tenggara, Sulawesi as well as Maluku and Papua, there were infra structure proj­ects which were behind schedule. They were: the Sunda Straits [JSS1] bridge project, the Batang Steam Powered Powerhouse in Central Java, Trans Suma­tra Highway, and the Muara Wahau Railway Project in East Kalimantan. These projects had been planned since more than 2 years ago.

Although already being offered to the private sector, some of whom were interested, the project re­mained unstarted due to land clearing problem, unsyn­chronous regulations as the location of project over­lapped with the conservation forest. An example was the Steam Powered Generator [PLTU] Batang which had been built since 2010 for which 197 hectares of land had been cleared or 81.42% of the needed 226 ha. Somehow the status of this project which was targeted to be completed by 2018 was still vague.

Since the very beginning the Government had been striving to help investors build infra struc­ture. Since 2011 more than 40 regulations in the form of Government's regulation or Presidential Regulation had been revised in accordance with private demand that project might progress. Beside regulations, the role of local Government, inter-institutional coordina­tion were also the determinant factor of successful MP3E1.

In case of road infra structure, land factor was the most problematic. The role of provincial Govern­ment in land clearing process for road building could be beneficial. Unfortunately many provinces were not actively participating. In the futrure, hindrances as such must not happen again so MP3EI could be bet­ter in effect to elevate Indonesia high and improve people's welfare. (SS)

Business New - May 7, 2014

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