JAKARTA. We don’t expect much from President Joko “Jokowi” Widodo’s visits to Japan and China this week in the way of wooing investors for infrastructure development, which has been one of the top priority programs of his government.
Jokowi asserted on the eve of his foreign trips that his visits to the two giant economies were largely about luring investors specifically to develop Indonesia’s infrastructure, such as airports, seaports, power plants, railways and freeways.
But the President has nothing to show off to the potential investors as he has miserably failed to make any breakthrough in facilitating the construction of big infrastructure projects, which have been stalled for years because of land-acquisition problems and other snags in the bureaucratic licensing system.
The high-profile, multibillion dollar coal-fired power generation project in Batang, Central Java, involving Japanese investors has been delayed for more than three years despite “strong lobbying” by Japanese leaders even though more than 90 percent of the land required for the huge power complex has been acquired. The financing package for the project had been closed, its Indonesian shareholder is one of the country’s largest thermal coal producers in Kalimantan. Tragically, the remaining 10 percent of land that has yet to be cleared has stalled the project for the past three years.
The Batang power project, which will add 2,000 megawatts to the Java power grid, is urgently needed and imperative because Java is predicted to suffer a major power crisis in 2018 without a significant increase in the generation capacity. But President Jokowi and his predecessor Susilo Bambang Yudhoyono simply failed to show any sense of urgency or assert strong leadership.
Likewise, land acquisition problems also have been slowing down the construction of Jakarta’s MRT project that also involves Japanese investors, thereby further delaying its completion schedule. The Jakarta monorail project involving Chinese and Singaporean investors hit imbroglio after its grand launch by then Jakarta governor Jokowi in 2013.
This list of high profile yet stalled projects, which the country badly needs to improve the overall competitiveness of its economy and its grossly inefficient logistics system, could go on and on.
For sure, Jokowi would witness the signing of dozens of memorandums of understanding (MoUs) for Japanese and Chinese investment commitments to Indonesia but we have been accustomed to such prearranged ceremonial events just to show that such state visits achieved something. Over the past decade, president Yudhoyono also witnessed the signing of many MoUs on investment projects during his state visits to Japan, South Korea and China but very few of them were realized.
In fact, the Investment Coordinating Board (BKPM) announced last week that it had canceled 6,230 foreign investment projects worth more than US$10 billion involving mostly businesses from Korea, China, Malaysia and Japan because the projects had failed to materialize due to various reasons.
Jokowi, therefore, needs to make breakthroughs in several big infrastructure projects to gain investor confidence.
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