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Improving Connectivity in Indonesia: The Challenges of Better Infrastructure, Better Regulations, and Better Coordination

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  • Henry Sandee

Abstract

This paper presents and discusses the main challenges that an archipelago like Indonesia is facing in improving its connectivity. Distinguishing between intra‐island, inter‐island, and international connectivity is essential in order to understand the nature of the challenges and causes behind the bottlenecks. High domestic shipping costs are identified as one key challenge. The Government of Indonesia has identified improved connectivity as a key issue in promoting economic growth, especially in the manufacturing sector, now that Indonesia can no longer rely on commodities as a driver of growth. Better infrastructure, regulations, and coordination among stakeholders are crucial components in promoting improved connectivity for manufacturing growth. Promoting investment in infrastructure is necessary, including both hard and soft infrastructure. However, Indonesian experience highlights that without regulatory reform and improved policy coordination, infrastructure investment will continue to lag behind. There is a need for an improved and empowered governance structure to turn investment plans into reality.

Suggested Citation

  • Henry Sandee, 2016. "Improving Connectivity in Indonesia: The Challenges of Better Infrastructure, Better Regulations, and Better Coordination," Asian Economic Policy Review, Japan Center for Economic Research, vol. 11(2), pages 222-238, July.
    • Handle: RePEc:bla:asiapr:v:11:y:2016:i:2:p:222-238
    DOI: 10.1111/aepr.12138
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    References listed on IDEAS

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    1. World Bank, 2014. "Indonesia - Avoiding the Trap : Development Policy Review 2014," World Bank Publications - Reports 19326, The World Bank Group.
    2. World Bank, 2014. "Indonesia : Avoiding the Trap," World Bank Publications - Reports 18944, The World Bank Group.
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    Cited by:

    1. Lilis Yuaningsih & R. Adjeng Mariana Febrianti & Hafiz Waqas Kamran, 2020. "Reducing CO2 Emissions through Biogas, Wind and Solar Energy Production: Evidence from Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 10(6), pages 684-689.
    2. Yuri Sato, 2016. "Comment on “Improving Connectivity in Indonesia: The Challenges of Better Infrastructure, Better Regulations, and Better Coordination”," Asian Economic Policy Review, Japan Center for Economic Research, vol. 11(2), pages 241-242, July.
    3. Hal Hill & Takatoshi Ito & Kazumasa Iwata & Colin McKenzie & Shujiro Urata, 2016. "Connectivity and Infrastructure: Editors' Overview," Asian Economic Policy Review, Japan Center for Economic Research, vol. 11(2), pages 161-175, July.
    4. Ridha, Ahmad & Masbar, Raja & Aliasuddin & Silvia, Vivi, 2022. "Asymmetric Price Transmission in the Cocoa Supply Chain in Indonesia," Economia agro-alimentare / Food Economy, Italian Society of Agri-food Economics/Società Italiana di Economia Agro-Alimentare (SIEA), vol. 24(1), May.
    5. Ahmad Ridha & Raja Masbar & Aliasuddin Aliasuddin & Vivi Silvia, 2022. "Asymmetric Price Transmission in the Cocoa Supply Chain in Indonesia," Economia agro-alimentare, FrancoAngeli Editore, vol. 24(1), pages 1-21.
    6. Muhamad Chatib Basri, 2017. "Reform in an imperfect world: the case of Indonesia," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 31(2), pages 3-18, November.
    7. Delik Hudalah & Tessa Talitha & Seruni Fauzia Lestari, 2022. "Pragmatic state rescaling: The dynamics and diversity of state space in Indonesian megaproject planning and governance," Environment and Planning C, , vol. 40(2), pages 481-501, March.

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