Infrastructure will take the stage this weekend as a theme of the second televised debate between Indonesia’s presidential and vice presidential candidates for the 2019 election.
As the incumbent, President Joko “Jokowi” Widodo will have plenty to talk about – for each year of his term since 2015, his government claims to have built more than 3,000 kilometres of major roads, almost 30,000 metres of bridges and 44,000 units of low-income housing, as well as toll roads, dams, airports, irrigation systems, rail lines and more.
Of course, his opponent Prabowo Subianto may pick up on the fact that some of this spending has fallen through the gaps – in 2017 alone, as many as 241 cases of corruption and bribery were identified in the infrastructure sector, incurring state losses of up to Rp 1.5 trillion (about AU$151.5 million).
So what are the costs and benefits of the government’s spending spree on infrastructure? Where is the money coming from? And how can we be sure that it’s going to the right places? These were the basic questions framing recent analysis of the national budget conducted by Seknas Fitra, the Indonesian Forum for Budget Transparency.
Spending big on infrastructure
The ascension of Jokowi’s “Working Cabinet” in 2015 was marked by a significant jump in infrastructure spending. The Rp 256.1 trillion earmarked for infrastructure from the national budget that year represented a 63 per cent increase on the amount allocated in the final year of President Susilo Bambang Yudhoyono’s “United Indonesia Cabinet”.
Since then, infrastructure spending has continued to increase every year – the biggest increase came in budget year 2016-2017, when the sector’s allocation rose by Rp 110.6 trillion, an increase of 41 per cent. Over the president’s five-year term, infrastructure has accounted for an average 17 per cent of total state spending.
This flow of resources for infrastructure has affected other sectors as well. Given that infrastructure development is considered to play a role in public welfare, the government may be able to claim its success in reducing the poverty rate to a single digit (9.7) was made possible by its increased infrastructure spending. Yet economic growth still hasn’t budged from an average of 5.14 per cent, according to year-on-year numbers from Statistics Indonesia (BPS).
Falling through the cracks
Not all the money being spent on infrastructure has reached its intended target, to say the least. Cracks in state bodies and institutions have been exploited to leak funds into the wrong hands, incurring trillions of rupiah in state losses.
Some Rp 1.5 trillion was lost from the infrastructure budget in 2017, including Rp 34 billion in bribes, more than double the previous year