Regional strategic infrastructure development

Balikpapan 27/2/13. Coordinating Minister for Economic Affairs Hatta Rajasa gave a presentation with the title of Non -Conventional Financing Approach Regional strategic infrastructure development to accelerate the construction of the six Indonesian Economic Corridors at the National Working Meeting IV of the Bappeda Provincial Association in Indonesia at the Green Hotel Senyiur Jl. Ars Muhammad No.7 Balikpapan.

Implementation of the National Working Meeting IV of the Provincial Bappeda Association in Indonesia at the Green Senyiur Hotel, Jl. Ars Muhammad Number 7 Balikpapan City from 26 to 28 February 2013 with the theme "Synergy of Multi -Party Planning for the Success of Infrastructure Development, Population and Quality and Accountable Environment" was officially opened by the Governor of East Kalimantan, Dr.H. Awang Faroek Ishak.

Rakernas IV Provincial Bappeda Association in Indonesia followed by participants of approximately three hundred and fifty people consisting of all Heads of Provincial Bappeda throughout Indonesia or officials who represent and related officials in the scope of the Provincial Government in Indonesia, the Ministry of Bappenas, the Ministry of Economics, Ministry of Finance , Ministry of Tourism and Creative Industry, and all Heads of Bappeda in East Kalimantan.

In his presentation the Coordinating Minister for Economic Affairs stated that the need to have an important lesson that has been carried out by the country of China in improving a very fast economy, namely: (1). Since the mid-90s, the contribution of consistent infrastructure spending around 9-11 percent of GDP; (2). The contribution of the government budget (central and regional) to infrastructure increased from around 3 % in the mid-90s to around 7 % around 2000, and eventually declined back to 4 % in 2005. This shows the importance of the government's role as a leader in In the acceleration of infrastructure development before finally the private sector is interested; (3). In addition to the granting of a number of tax incentives for infrastructure development, private involvement (either through PPP or not) is highly encouraged by the aggressive BUMN in developing financial engineering forms in infrastructure financing (especially the infrastructure bond market which is relatively developed in China).

While very valuable lessons from Indian countries on economic improvement are very rapid so that including countries in Asia which are very influential in improving their economy by carrying out various priority programs including: (1). The rapid development of Indian infrastructure development occurred in the period 2005 - 2010. Infrastructure investment increased rapidly from around 5 % of GDP to around 8 % of GDP; (2). The PPP mechanism is very seriously considered by the Indian government. In addition, since the early 2000s developed various other financial engineering models such as infrastructure bonds and performance based annuity scheme (PBAS), namely infrastructure payments completed by the private sector through a public budget that was allocated respectively for a period of 5-10 years.

National Policy Recommendations

1. Learning from the conditions before the 1998 crisis and also experience from China and India, the acceleration of infrastructure development must be driven by the government's commitment (including local governments). The infrastructure budget allocation needs to be increased to 3-4% of GDP. This is the initial capital to build "trust" investors who are interested in contributing in infrastructure development;
2. The expansion of infrastructure development led by MP3EI needs to be understood that the limitations of financing by the government cannot only depend on the implementation of KPS patterns because many Eastern Indonesia (mainly) requires support for higher development acceleration compared to other regions. KPS is only feasible for relatively advanced areas; 3. Through the spirit of MP3EI, there is currently a selection of projects (through a bottom up and professional process) high priority infrastructure that will be considered specifically by the government (not limited to the conventional state budget budgeting pattern). The commitment of all parties to later consistently implement in accordance with the initial agreement will be a very important signal for investors and financial institutions;
4. In the development of KPS programs, in addition to strengthening the coordination and integration of the programs offered (it is necessary to have a list of agreed up to all elements of the relevant government), the rules of the game need to be improved so that it is competitive with KPS offers in competitor countries. It should be recognized that the appeal of the KPS programs offered by Indonesia is often considered less attractive compared to supply by neighboring countries. 5. The assignment of BUMN which is recently encouraged is an important breakthrough that needs to be continued to be improved and the quality of the management process. In this goal, a few steps that need to be taken immediately to mobilize funding, especially: a. Utilizing direct loan facilities with cheap interest from multilateral/bilateral financial institutions (WB, ADB, JICA, etc.). Requires adjusting rules; b. Encourage SOEs assigned to carry out IPOs, issuance of infrastructure bonds, or utilization of pension and insurance funds; c. It is necessary to be tailed for the use of credit guarantee facilities by international institutions in order to reduce interest rates and extend the return period from loans to private banks (a kind of back-to-back credit guarantee, this requires government guarantees); d. The assignment project by BUMN will have a "selling value" that is more interesting if the scope of its duties is expanded with the management of the area around the infrastructure that is built. 6. Strengthening infrastructure financial institutions such as PT SMI or PT. IIF (Indonesia Infrast. Finance) with the addition of PMP or encouraging cooperation with other financial institutions (domestic and abroad) to mobilize suitable funds for long-term investments; 7. Increasing capacity and expanding financing through a sukuk scheme that is very successful applied in Malaysia because the principle of "sharing" which is the essence of this scheme does not only provide a cheaper "cost of money" compared to the flower system, however, more important provide a tighter control system for the pattern of utilization of funds. The question is now, to accelerate the expansion of its application, will it only be limited to Islamic financial institutions?

While the Rakernas IV Bappeda Provincial Bappeda Association Resource Resource includes: 1. Coordinating Minister for Economic Affairs, dr. Hatta Rajasa; 2. Minister of National Development Planning/Head of Bappenas, Prof. Dr. Armida Salsiah Alisjahbana, SE., MA; 3. Deputy Minister of PPN/Bappenas for Regional Development and Regional Autonomy; 4. Directorate General of Financial Balance of the Ministry of Finance; 5. Directorate General of Tourism Destination Development of the Ministry of Tourism and Creative Economy; 6. Director of Regional and Land of Regional Government of the Ministry of Home Affairs Regional; 7. Assistant Deputy for Spatial Planning and Regional Development of the Coordinating Ministry for Economic Affairs; 8. Head of DKI Jakarta Bappeda; 9. Head of West Java Bappeda; 10. Head of East Kalimantan Bappeda, Dr.Ir.H. Rusmadi.ms; and 11. Head of East Nusa Tenggara Province Bappeda.

Formulation of Rakernas IV of the 2013 Provincial Bappeda Association in East Kalimantan

Based on the presentation of the speakers and discussion of the participant as well as the results of the study and analyzing the various thoughts delivered by the speakers, the Heads of the Provincial Bappeda throughout Indonesia who were present at the National Working Meeting IV of the Provincial Bappeda Association of all Indonesia agreed to be able to take strategic steps for the realization of the acceleration Development in the regions to support national targets through quality and accountable development planning. Based on these things above the provincial Bappeda association throughout Indonesia, declared several things, namely:
1. Assign the management of the Association to oversee and communicate more intensively with the Ministry /Institution related to the results of the 2012 Rakernas Declaration in Ambon, Maluku Province;
2. Immediately follow up on the direction of the Indonesian Coordinating Minister for the Indonesian Economy at the 2013 National Working Meeting in Balikpapan, East Kalimantan Province to propose the need to urge infrastructure development in spurring the implementation of MP3EI in each corridor;
3. Intensive cooperation is needed in improving the quality of regional development planning and data based on data, namely;
a. Development of Poverty Alleviation Planning System Based on KK
b. Formulation of proposals to Bappenas, to facilitate the operation of the planning system software in real time with the proposed name is RKPindo-Online, as an information system that can help real time planning to realize quality and accountable development planning
c. Developing models of regional leading development into a national development model; Green Economic Development Development, Environmental and Population Development, Village/Kelurahan-Based Development and the Development of Other Models in all Provinces; 4. To improve the quality of regional planners, it is necessary to cooperate in improving human resource development through planning training, development of insight between provincial Bappeda and the Ministry of Religion through the support of international institutions; 5. To improve development synergy, the provincial Bappeda must improve the quality and intensity of coordination vertically with the Regency/City Bappeda, between the provincial Bappeda and to improve the facilitation of Bappenas in building coordination and communication with the Ministry/Institution;
6. Establishing the Implementation of the National Working Meeting (Rakernas) v Provincial Bappeda Association in Indonesia with the focus of the discussion of "Acceleration of Indonesian Tourism Development" in Gorontalo Province.

(Public Relations Bappeda Kaltim/Sukandar, S. Sos).