Master Plan for the
acceleration and Expansion of Indonesia’s Economic Development (MP3EI) program
has been there-year-old since it was implemented in 2011. The government
declared that from July to December 2014, a ground breaking ceremony will be
performed on 132 MP3EI projects with an investment value of IDR 443.5 trillion.
The project is expected to provide a positive effect on
the national economy. Groundbreaking ceremony on the 132 projects will be based
on the commitment of the private sector and project officers.
The groundbreaking ceremony, in the second half of this
year, will be done more on small projects whose value is not too big, but have
a quite good effect on the economy. The small projects are basic infrastructure
projects with a total investment of IDR 443.5 trillion.
In addition to the 132 projects, in the second half of
2014, there are eight other MP3EI projects schedule to be inaugurated by the
government. The eight projects have been worked on before, namely there
projects in Java corridor, two in Kalimantan corridor, and three in
Maluku-Papua corridor.
Projects that will be inaugurated include double-track
railway project across the north of Java connecting Cirebon and Surabaya with
an investment of IDR 16.4 trillion, Sepinggan international airport project in
East Kalimantan with an investment of IDR 2.1 trillion, and ibra airport
development project, Tual baru with an investment of IDR 200 billion.
The implementation of MP3EI projects still face problems,
namely preparation to project implementation, land, and funding. In terms of
project preparation, the problem is in EIA (environmental impact assessment),
the auction process or contract problems, and regulatory preparedness.
Then, in terms of land, there is a problem in designation
of land, land acquisition, land disputes, and overlapping of regions.
Meanwhile, in funding, there is immature financing scheme. Of all these
problems, the realization of the investment can still be done quite well
dominate the entire connectivity of infrastructure projects, because the state
budget (APBN) is very limited.
Now, approaching the change of national leaders,
Indonesia has high hopes on the president elect to continue with MP3EI projects
because the realization to this day is very minimal. Investment realization of
MP3EI in the first semester of 2014 worth IDR 25 trillion, or only 4.2% of the
target for 2014 at IDR 586 trillion.
Although the results of verification states that a number
of projects, which construction cannot begin in 2014, is valued at IDR 117.5 trillion,
but the realization in the first of 2014 only reached 5.3%. In a video
conference by President Susilo Bambang Yudhoyono during inauguration,
groundbreaking, and reporting of MP3EI projects recently (September 5), six
representatives of governors of the six economic corridors always requested for
a sustainability of the program by the president-elect.
A majority of them considered that the improvement of the
economic sector with the implementation the program that began in 2011, to this
day it is still considered unoptimal, because of some obstacles that occur.
This opinion is reinforced by the statement of the
Coordinating Minister of Economy, Chairul Tanjung, that the implementation of
MP3EI requires a long time so that the benefits of the program cannot be
enjoyed directly.
However, if economic growth is high, equitable, and
qualified due to the positive impact of MP3EI, it will automatically reduce property.
Employment was believed to increase.
Based on data of the half of 2014, since the lancing of
this program in 2014 until the first half of 2014, MP3EI was able to absorb 7.25
million workers. Of the total workforce, high school/vocational school
graduates constitute the largest portion, i.e. 2.89 million people, followed by
junior high school graduates at 2.65 million people.
Meanwhile, according to
data of the office the Coordinating Ministry of Economy, MP3EI project
realization from May 27, 2011 until the first quarter of 2014 is IDR 838.9
trillion. The progress of the infrastructure sector from the state budget is
IDR 131.8 trillion, state-owned enterprises IDR 89.17 trillion.
For project distribution,
amongst others, IDR 397.7 trillion are spreading in Sumatra as much as 40
projects worth IDR 55.63 trillion, Java with 32 projects worth IDR 217.7
trillion, Kalimantan with 47 projects worth IDR 57.19 trillion, Sulawesi with
24 projects worth IDR 22,496 trillion, Bali – West Nusa Tenggara with 28
projects worth IDR 17,548 trillion, and Papua – Maluku with 33 projects worth
IDR 27.15 trillion.
So, the MP3EI program has
been appropriate to be continued by the new government. However there have been
still plenty of obstacles in the realization of projects so far, especially
land acquisition. Therefore, it is appropriate if now the office of the
Coordinating Minister of Economy always encourages all central and local
government officials to coordinate the execution.
And, there is also a
problem in the central government, i.e. slow coordination between ministries
making the licensing process too complicated. Hence, all relevant government
agencies are required to coordinate with each other. One of the projects, which
is delayed, is the construction of steam power plant (PLTU) in Batang, Central
Java which is still hampered by land acquisition problem.
Related to this, there is a
growing perception that if people will not let go of the land, the government
agreed to find a new location as had previously been planned by the
Coordinating Minister of Economy. The governors also believed that the
government should encourage and continue the MP3EI program.
Projects in MP3EI,
basically, already exist in the government’s project plan that will be done and
contained in the Medium-Term National Development Plan. Thus, whether MP3Ei
will be continued or not, would not affect the implementation of projects that
have been scheduled. It means institutionally it may be continued or
discontinued by the new government. The important thing is that the project is
not lost because it is already scheduled.
President SBY also
expressed his expectation to leave it to Jokowi as the president-elect, so that
what has been achieved in the framework of a three year MP3EI program could be
continued, because there is still a remaining 11 years. The Coordinating
Minister of Economy, Chairul Tanjung, asserted that MP3EI is important to be
continued by the new government.
Thus, the potential of
Indonesia to become a developed country could be achieved. Indonesia has all
the prerequisites to become a developed country, such as abundant natural
resources, a great number of productive population and others. It will be a
valuable asset if it is led by a strong leader.
The acceleration project
for Indonesian economic development has been initiated by SBY administration
since 2011-2012. The main focus is development of new economic center and
acceleration of infrastructure that connects every region in the country. Even,
the government claims that MP3EI projects could lift Indonesia’s per capita
income to USD 15 thousand per year and Indonesia could become a country with
the 7th largest economy at the age of 100th year of the
Republic of Indonesia. (E)
Business News - September 17, 2014
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