Indonesia economic growth has been constrained by serious infrastructure deficiency. Thus, the government-led infrastructure investment has been the focus of the Indonesian government in recent years. However, new concern arises on how this infrastructure development can be consistent with social and environmental sustainability. A concept of quality and sustainable infrastructure can be the answer.
Sustainable Infrastructure is infrastructure that is socially, economically, and environmentally sustainable. Sustainable infrastructure investment will support the achievement of SDGs through enhancing access to basic services, promotes inclusive growth and promotes environmental sustainability. As countries are at different levels of development, it is important to understand the drivers for successful sustainable infrastructure investment by type of countries based on their development stage.
This set of issues was higlighted by Prof. Armida Alisjahbana, Director of SDGs center, Universitas Padjadjaran in her address at the International Economic Forum on Asia, held in Tokyo, Japan, on April 14, 2017. This forum was organized by OECD Development Center, Ministry of Foreign Affairs Japan and ERIA.
In closing her address, Prof. Armida argues that to support the development of financing strategies as outlined above, several enabling factors and environment needs to be enhanced. Sound public institutions and foundations for public investment should be developed. Policy enabling conditions for SOEs and private participation need to be strengthened. Capacity to mobilize domestic investment through capital markets and financial institutions is needed as source of investment as it is geared towards more non-government sources.