Debottlenecking Principle in Indonesia’s Economic Corridor (IEC) Policy

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The focus on economic corridors has become a trend of various countries’ development strategies. An economic corridor refers to economic development targeted to increase growth in a certain period and in specific areas (AGIL 2000). Its pre-condition is mostly infrastructure development, both in terms of transportation facilities and telecommunications, as well as in electricity (Bafoil and Ruiwen 2010). These large-scale development plans pertain to a form of modernization that reflects very much the thinking of the ruling elites and corporate capital. It involves a huge amount of capital from entrepreneurs. Also, its growth strategy might lead to benefits too exclusive to be accessed by large parts of the population.

The newest Indonesian Economic Corridor (IEC) policy called MP3EI 1 has “not as business as usual” as its slogan. One of its strategies is to apply the debottlenecking principle in promoting investments flows within Indonesia’s six corridors 2 . By relying on capital owned by private sectors, IEC allows privatization of a number of public assets. The IEC identifies infrastructure as the foundation of any projects, but the private sector is relied upon to finance infrastructure development (such as roads, communication and electricity) as the government itself lacks sufficient funds to do so. The debottlenecking principle may be considered so as to mitigate the obstacles in investment activities, which may be related to the bureaucracy, or financing or social conflicts due to lack of transparency in processes.

Author: Hilmayati Safitri

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