Indonesia: Tourism, ‘green fuel’ top Jokowi development agenda

  • From smelters and tourist hotspots to “green fuel” and high-speed railways, the government has set its sights on completing 41 priority projects estimated to cost a combined USD540bn between 2020 and 2024, an official document shows.
  • According to the 2020-2024 National Medium-Term Development Plan (RPJMN) signed by President Joko “Jokowi” Widodo on 20 Jan 20, Indonesia’s development programs are aimed at achieving three goals: independence, justice and sustainability. The priority projects are also aimed at boosting economic growth, human capital development and disaster mitigation.
  • As Jokowi seeks to attract investment, rev up industries and accelerate infrastructure development in his second term, the 41 priority projects in the RPJMN are expected to transform Indonesia’s economy.
  • Java’s high-speed rail
  • With construction of the Jakarta-Bandung high-speed railway already underway, the government has made plans for a Jakarta-Semarang high-speed railway that will cut travel time from 5 hours to 3.5 hours by 2025.
  • A business consortium of Indonesian and Chinese companies called PT Kereta Cepat Indonesia-China (KCIC) will invest USD6.07bn to build the 142-km Jakarta-Bandung semi-high-speed railway, which will cut travel time from 3 hours to just 40 minutes.
  • KCIC is comprised of China Railway Group Limited and four Indonesian state firms: railway operator Kereta Api Indonesia (KAI), construction company Wijaya Karya (Wika), plantation firm Perkebunan Nusantara VIII and toll road operator Jasa Marga.
  • Palm-oil-based ‘green fuel’
  • The government has focused on increasing domestic palm oil consumption following the introduction of policies by the European Union to limit consumption of palm oil and palm-oil-based products within the bloc, including imposing an 8% to 18% import duty on Indonesian biodiesel in Dec 19.
  • The RPJMN lays out a plan to boost production of palm-oil-based “green fuel”. The government plans to build the RUIII Plaju refinery in Palembang, South Sumatra, to produce 20,000 barrels of “green fuel” per day. The refinery, which will cost IDR32tr to build, is expected to be operational by 2024.
  • ‘Beyond Java’ development programs
  • From improved transportation connectivity to the development of new tourist hot spots, industrial complexes and smelters, the RPJMN outlines the government’s goal to channel billions of USD in investment into provinces outside Java.
  • Moreover, nine industrial complexes will be built outside Java in addition to 31 smelters. The two initiatives will cost a combined IDR317.4tr, with funds expected to come from the state budget, the private sector, state-owned enterprises and public-private partnerships.

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