Abstract
In mid-September the Indonesian government said it had set aside IDR1.4trn (US$149.8mn) to speed up
construction of the Trans Java toll road. The money would be spent on accelerating land clearance, which
had caused delays in construction of several segments of the highway. In our just-published Indonesia
Freight Transport Report, we predict that road freight traffic will grow by an annual average of 5.3% in
2009-2013, slower than the 5.7% rate registered in the preceding five year period. Our forecast has taken
into account the effect of the current global economic growth slowdown.
There are a number factors behind this forecast. The Indonesian economy and commodity trade will not
grow as strongly as expected earlier. We are projecting annual GDP growth of 5.2% in 2009-2013. We
are now projecting an overall annual average growth rate of 5.7% for the freight transport sector as a
whole during 2009-2013. Total freight growth and road haulage growth will both be higher than GDP
expansion - 5.7% and 5.3% versus 5.2% - but the reality is that for an economy of Indonesia's size and
opportunity, this is still somewhat below the country's and the industry's real potential. A key problem
facing the road haulage industry is the lack of investment in new roads. Freight carried on other transport
modes is set to grow faster than road haulage, with 5.6% growth forecast for rail, 5.9% for shipping, 6.0%
for pipeline throughput and 6.0% for air freight.
Indonesia's freight industry has a poor-to-average BMI freight rating with a composite score of 56.9 out
of a potential total of 100. Comparatively speaking, its stronger points include the country's 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, and indicate that
a lot more needs to be done before the industry begins to perform closer to its potential.
For the 2009-2013 forecast period, we expect the transport and communications sector to grow on a par
with the economy as a whole. It will achieve average annual growth of 5.2%. The total value of transport
and communications GDP will rise to US$53.2bn in nominal terms by 2013, representing 6.5% of
Indonesia's GDP.
| 
View Cart
