Infrastructure Development Should Use Local Content, President Jokowi Says
Date 6 November 2019
Infrastructure development should create more jobs and use local content, President Joko “Jokowi” Widodo has said.
“Let me remind you that infrastructure development should not use import products since it will not benefit our small and medium-sized enterprises (SME),” President Jokowi said at the Opening of Construction Indonesia 2019, at the Indoor Hall B, JI-Expo Kemayoran, Wednesday (6/11).
On that occasion, the President also called on entrepreneurs in construction sector to involve SMEs in the infrastructure development that is expected to improve the quality of life of the people.
“I want you to pay attention to local production, so that the massive infrastructure development can boost industrialization,” President Jokowi said.
The Government, he added, also provides heavy equipment, raw material produced by the country. Thus, construction sector can contribute to narrow down current account deficit and trade balance deficit, he said
Also on that occasion, President Jokowi asserted that the success in infrastructure development depends on budget preparation since the State Budget (APBN) cannot fund all infrastructure projects.
Therefore, creative financing scheme such as Government-to-business Cooperation (KPBU), Non-state Budget Infrastructure Funding (PINA), and other schemes must be implemented he said.
Nevertheless, the President noted that the Government will fund infrastructure to regions that have low Internal Rate of Return (IRR) since not many private sectors want to invest in those regions.
“I always invite private sector to fund the projects. If they do not show interests, state-owned enterprises (BUMN) will carry out the infrastructure project, particularly in regions that have low Internal Rate of Return (IRR). If the BUMN refuses to do the project, the Government will fund it,” the President said.
President Jokowi also reminded that BUMN should not take all infrastructure projects alone, but let private sector and local entrepreneurs to be involved.
“I often receive complaints from local contractors be it in province, or regency/city level about BUMN which take all projects. I hope in the next five years, private sector and local contractors will play greater roles,” President Jokowi said, adding that he believes that the spirit of collaboration can make Indonesia catch up with other countries in infrastructure.