Due to multiplier effect, government boosts infrastructure projects amid Covid-19

This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.

Kontan Online: Ada multiplier effect, pemerintah genjot proyek infrastruktur di tengah Covid-19

17 August 2020

By Abdul Basith Bardan and Khomarul Hidayat

Kontan.co.id – Jakarta. The government is continuously boosting infrastructure construction amid the coronavirus (Covid-19) pandemic to achieve a multiplier effect from infrastructure projects. Benefits from improving the infrastructure sector are believed to be enjoyed sooner or later.

 This large multiplier effect can be achieved due to direct and undirect job creation. Besides that, in the future, when infrastructures are finished, our investment competitiveness will be stronger,” Deputy for Coordination of Regional Development and Spatial Planning of the Coordinating Ministry for Economic Affairs, Wahyu Utomo said when he was contacted by Kontan.co.id on Monday (17/8).

Wahyu said that the infrastructure constructions that would be boosted were labour-intensive projects. So, infrastructure can be the answer on how to absorb workforce.

Labour-intensive projects are boosted by President Joko Widodo amid the Covid-19 pandemic to improve the revenue of citizens during economic slowdown.

Several infrastructure projects are prioritised in the 2021 budget, including infrastructure projects that are in construction.

“If construction can be finished immediately, we can reap the benefits quicker,” Wahyu revealed.

Construction of toll roads, irrigation facilities, dams and reservoirs, industrial estates, and smelters can provide benefits in the future.

Besides that, in 2021, infrastructure construction will also be boosted to improve food sustainability. “Infrastructures that support food estate will be built by 2021 to improve our food sustainability,” Wahyu explained.

Previously, State-Owned Enterprise (SOE) Minister Erick Thohir was also boosting infrastructure projects that were constructed by SOEs. As an example, Erick said that the government had provided a state capital investment for PT Hutama Karya to construct Trans-Sumatra toll road.

Erick said that Trans-Sumatra toll road, which had connected Lampung and Palembang, had a significant impact, which could be seen from the increasing electricity consumption in the region.

“Hence, we see Trans-Sumatra toll road as a policy that must be continued,” Erick revealed.

Erick also said that he was planning to commence constructions for the tourism sector that would be the mainstay in the future. One of the constructions is a port that will be a tourism hub in Bali.

“During the construction, PT Pelindo III will also construct Benoa Port, which will be a tourism port that can also increase economic growth. So, it will also be connected to Labuan Bajo,” Erick explained.

President Jokowi, during his speech regarding the financial note and the 2021 draft state budget with the House of Representatives (DPR), has set the 2021 infrastructure budget to be Rp414 trillion.

The amount will be used mostly to recover the economy, provide basic services, and improve connectivity. It will also be used to provide digital infrastructure that is reckoned to be a strategic and crucial requirement during the Covid-19 pandemic.

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