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Indonesia to speed up strategic infrastructure construction

Xinhua, June 6, 2016 Adjust font size:

A Indonesian cabinet meeting on Monday decided to accelerate construction of strategic infrastructure projects as the country is attempting to lure more investment and pursuing higher GDP growth.

President Joko Widodo instructed ministers to watch closely on the country's priority programs comprising of 225 strategic infrastructure projects.

"..and we must ensure that the constructions of road, railways, airports, seaports, smelters and power grids, are carried out smoothly," President Widodo told the cabinet meeting at the State Palace on Monday.

"I ask economic chief ministry, development planning board, presidential staff office, to continuously monitor the implementation of the projects in real time. And should there be an obstacle, find immediately where is it," Widodo stressed.

President Widodo made the instruction following a report that the construction of the projects remained slow.

Six months after he signed a decree on the acceleration of the construction of infrastructure projects, only 44 percent of the 225 strategic projects are being implemented, but the rest are still under planning.

Financing is among the main problems hindering the construction of the projects, according to the president.

President Widodo, who came into office in October 2014, has conducted massive infrastructure projects as he aims to pursue over 7 percent GDP growth at the end of his five-year term.

A huge financing in part may widen deficit of the state budget as the target of tax collection is relatively lower.

The deficit is expected to widen to 2.48 percent of the GDP this year from the initial target of 2.15 percent of the GDP, Finance Minister Bambang Brodjonegoro has said.

Recently, S&P Global Rating refrained from upgrading Indonesia in investment grade due to weak fiscal performance, saying there is a possibility for a future upgrade. Enditem