Abstract
According to a report in the Jakarta Globe, the Ministry of Public Works will
receive IDR1.7trn
(US$147.9mn) of a US$6-7bn stimulus package being
provided by the Indonesian government. The fund
will be used to build up
to 3,000km of road projects in 2009, and is forecast to create almost 55,000
new
jobs. The funds would be used to support existing national roads as
well as for four Bina Marga projects.
These are the Lintas Timur Sumatra
in the Lampung Province and the Amplas flyover in the north
Sumatra
provincial town of Medan. The other two are the Manado-Mapangat Road in North
Sulawesi
Province and the Manokwari-Sorong Road in West Papua Province.
Indonesia has experienced very rapid
growth in the total number of road
vehicles in circulation. Despite being given a high priority in
government
spending programmes, road construction in Indonesia as a whole has progressed
at a slower
pace.
Across all freight subsectors, we see transport
growth, measured in mn-tonne kms (mntkms), rising by an
annual average of
4.7% over the next five years. This is lower than the 6.6% rate registered in
the
preceding half decade. In part, this is because the Indonesian economy
and commodity trade will not
grow as strongly as was earlier expected. We
are now projecting annual GDP growth of 4.6% in 2009-
2013, a relatively
good performance bearing in mind the 2009-2010 global recession. Total freight
growth
will be higher than GDP expansion. The reality is that for an
economy of Indonesia' s size and
opportunity, this is still somewhat below
what both the country itself and its freight industry can achieve.
Out of
all the main transport modes, pipeline throughput will lead the way, with
average annual growth of
5.4%, followed by road haulage (5.1%), air
freight (4.9%), inland water transport (4.8%), and shipping
(4.6%).
Indonesia' s freight industry has a poor-to-average BMI freight rating, with a
composite score of 56.7 out
of a potential 100. Comparatively speaking,
the country' s stronger points include long-term economic
risk, freight
growth and the transport intensity index (a measure of recent and forecast
foreign trade
growth). Compared with its peers, however, Indonesia' s
scores for long-term political risk, infrastructure
growth and regulatory
and competitive environments are all disappointing. This indicates that a lot
more
needs to be done before the industry begins to perform anywhere near
its potential.
According to our latest estimates, transport and
communications GDP rose by 7.8% in 2008. This is
1.7pps faster than
overall GDP, which we estimate was up 6.1%. For 2009-2013, we expect the
transport
and communications sector to expand on a par with the economy as
a whole, at an annual average of
4.6%. Transport and communications GDP
will rise to US$61.8bn in nominal terms by 2013, or 6.5% of
GDP.
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