Appreciating the Success of President Joko Widodo’s Infrastructure Program in Growing the People’s Economy
By Puspita Siswono )*
The success of the infrastructure program implemented by President Joko Widodo during his administration has had a significant impact on the economy of the Indonesian people. One clear proof of this success is the move of the National Capital from Jakarta to the Archipelago Capital (IKN) in East Kalimantan, which is not only a symbol of progress, but also a driving force for economic growth outside Java.
On various occasions, President Joko Widodo emphasized that the transfer of IKN was aimed at encouraging economic equality in Indonesia. So far, around 58 percent of gross domestic product (GDP) is on the island of Java, which shows quite significant economic inequality. By moving the capital to IKN, the government hopes to reduce the economic and population burden on Java Island while simultaneously triggering economic growth in other regions, especially in East Kalimantan, especially in Balikpapan and North Penajam Paser.
The decision to move the capital was also motivated by other considerations, namely the high population on the island of Java, which reached 56 percent of Indonesia’s total population. This heavy burden causes various urban problems in Jakarta, such as congestion, pollution and overpopulation. Therefore, moving the capital city is considered a strategic step to create a better balance between regions in Indonesia.
The development of IKN is also a symbol of Indonesia’s success in attracting foreign investment and international collaboration. One example is the collaboration between the Ministry of Foreign Affairs and the United Nations Industrial Development Organization (UNIDO) in holding the workshop “Cities of Tomorrow: Collaborative Strategies for New Cities.” This workshop discusses important issues such as economic growth, environmentally friendly development, and innovative financing for new cities. In this workshop, UNIDO even appreciated the IKN development which was considered visionary and well planned.
Not only IKN, other infrastructure programs such as the National Strategic Project (PSN) have also had a positive impact on the people’s economy. Referring to data from the Coordinating Ministry for Economic Affairs as of July 2024, as many as 233 PSN projects have been implemented with an investment value of IDR 6,246.7 trillion and are projected to absorb a workforce of 2.71 million people. From 2016 to February 2024, 195 projects have been completed and are fully operational, providing a direct impact on economic growth in various regions in Indonesia.
This massive infrastructure development does not only focus on main areas such as Java, but also reaches areas that are currently less developed. An example is the Freeport Indonesia project in Gresik with an investment of IDR 58 trillion, which is not only the largest investment in one location, but also has a significant economic impact on the surrounding area. Apart from that, Special Economic Zones (KEK) such as KEK Nongsa Digital Park and KEK Singhasari also show how PSN can be an important pillar in Indonesia’s economic transformation.
President Jokowi has also approved the addition of 14 new PSNs which will begin construction this year. These projects are mostly private initiatives that are expected to create jobs without burdening the State Revenue and Expenditure Budget (APBN). Some of these new projects include the Pantai Indah Kapuk Tropical Concept, the Wiraraja Industrial Area on Galang Island, and the North Hub Development Project off the coast of East Kalimantan.
However, the success of this infrastructure program is not without challenges. One of the obstacles that often arises is land acquisition and spatial planning problems, which hamper several projects. To overcome this, support from all stakeholders is very necessary. The government, in this case, continues to carry out various mitigation efforts through programs and policies that focus on strengthening performance in various sectors, including the industrial area sector.
Coordinating Minister for Economic Affairs Airlangga Hartarto emphasized the importance of industrial areas in attracting investment and creating jobs. Industrial areas have succeeded in attracting large amounts of investment, creating millions of jobs, and driving sustainable economic growth in recent decades. This contribution is not only felt at the national level, but also in the regions, where industrial areas act as the main driver of regional development.
In a global context, the development of industrial areas must also be in line with issues of environmental sustainability and social progress. Therefore, the direction of industrial area development is currently shifting to Smart Eco Industrial Park, which prioritizes sustainable development, circular economy and green industry combined with the application of advanced technology. This step is expected to increase Indonesia’s competitiveness amidst increasingly fierce global competition.
The success of the infrastructure program under President Jokowi’s leadership shows the government’s commitment to building a solid foundation for Indonesia’s economic growth. With these programs, it is hoped that equitable development and improvement of community welfare can be realized throughout Indonesia. The infrastructure that is built is not only the backbone of the economy, but also a tool for creating social justice and uniting the nation.
By continuing to develop quality and sustainable infrastructure, Indonesia can ensure that the benefits of this development can be felt by all levels of society, not only now, but also for future generations. This success must be appreciated as clear evidence that inclusive and sustainable development is the key to shared prosperity.
)* the author is an observer of economic policy
