Reality Check

INDONESIA'S new leaders, Joko Widodo and Jusuf Kalla, need to set clear priorities to find the cure for three chronic 'economic sicknesses': poor infrastructure, high economic costs and the ever-increasing fuel subsidies. The first two are nothing new.

Poor infrastructure is a consequence of the government's long years of undermining its importance, which has led to continuous underfunding of projects. Next year, the budget allocation for infrastructure will only be around Rp196 trillion. This is less than half the amount to be spent on subsidies, which totals Rp415 trillion: Rp345 of energy subsidies and Rp70 trillion for non-energy subsidies. As a result, very few harbors or airports will be built, damaged toll roads in need of repairs will remain neglected and the construction of additional freeways will be shelved.

November 4, 2014