Infrastructure development in Indonesian economy: policy implications

Abstract

Infrastructure development is important to sustain countries' economic

performance. Empirical study of Infrastructure development in Indonesian economy

revealed that Indonesia in recent decade is more driven by labor intensive development

than by capital intensive, such as infrastructure development. Indonesia is hampered by

challenges on their endeavors in developing appropriate infrastructure. However, the

Government of Indonesia (Gol), up until the current time, has been putting continuous

efforts to overcome those challenges through regulation and institutional reforms. One

of the most important policies on infrastructure development is Public Private

Partnership (PPP) scheme in which the implementation needs a synergy from many

institutions and actors.

This study will elaborate and analyze the challenges of infrastructure

development, the policies that set up by government in order to solve the challenges

and the impacts of current infrastructure development on Indonesia's economy.

Key words: infrastructure, economic development, policy, PPP