JAKARTA. Government plans to increase capital expenditure (capex) in 2017 by Rp 100 trillion. The additional capex will be allocated to jack up infrastructure development.

Minister of Public Works and Housing Basuki Hadimuljono said that President Joko Widodo wants to increase the capex in 2017 by IDR100 trillion to the total amount of Rp 400 trillion.

The additional funds will be allocated to Ministry of Public Works and Housing, Ministry of Transportation, Ministry of Agriculture, and Ministry of Energy and Mineral Resources.

According to Bambang, President Joko Widodo mentioned that Indonesia’s competitiveness has dropped due to the poor infrastructure. Therefore, the President has directed to increase the capital expenditure to jack up the infrastructure development.

According to 2015-2016 Competitiveness Report released by the World Economic Forum (WEF), Indonesia’s competitiveness has dropped from the rank of 34 out of 140 global economies in 2014-2015 to the rank of 37 during 2015-2016 period. The rank is lower compared to three ASEAN countries, namely Singapore, Malaysia, and Thailand that stand at the rank of 2, 18, and 32 out of 140 economies, respectively.

Basuki added that under President Joko Widodo’s instruction, Minister of Finance Sri Mulyani is considering to shift some funds allocations to infrastructure sector. However, the minister still refused to give detail on the plan.

President Jokowi expects that the increase in capital expenditure will be effective in eradicating poverty, reducing social gaps, and creating new jobs. Furthermore, President also calls the ministers to strengthen capital and goods expenditures to drive national economy.

As an information, 2017 Revised State Budget sets to allocate IDR171 trillion of IDR300 trillion of total capital expenditure to infrastructure project. (Translator: Muhammad Farid)

Editor: Sanny Cicilia