Indonesia Has Positive Economy: Japan Bank CEO

Jakarta (Antara Bali) - Tadashi Maeda, CEO of the Japan Bank for International Cooperation (JBIC), assessed that the condition of Indonesia's economy was in good shape, despite the global pressure not being completely subsided.

"Indonesia is able to maintain its macro-economic conditions pretty well during the two years of President Joko Widodo's administration," Maeda said here on Thursday.

According to Maeda, the efforts taken by the Indonesian government to maintain national fiscal sustainability and resist widening budget deficit have been reducing potential risks from abroad.

"Indonesia has retained its budget deficit below 3 percent of GDP and reduced subsidies to be diverted to infrastructure investment. These steps have stabilized the state's finances and boosted economic growth without incurring risks," he said.

Another positive economic feature is the equal distribution of major infrastructure such as highways, ports, airports and power plants in various regions across the nation, Maeda said.

"The policies of development are now more focused on the outer islands, particularly the eastern part of Indonesia," Maeda said, adding that these positive indicators made by JBIC will help in funding infrastructure projects in Indonesia, such as power plants, that benefit society.

He asserted that it should not be a concern if the projects are not guaranteed by the government or if the land procurement still poses an obstacle in the construction projects, like the one that occurred in the construction of Batang power plant in Central Java some time ago.

Earlier, Indonesian electricity company PLN and JBIC agreed on funding US$310 million for a power plant construction in Tanjung Priok, North Jakarta, with a capacity of 800 MW.

The Priok power plant project or Jawa-2 Combined Cycle Power Plant worth $437 million is the second project of PLN, which is agreed directly by JBIC without requiring a guarantee from the Indonesian government.

The PLN's first project funded through JBIC loan without government guarantee is the Lontar power plant in Tangerang, Banten, with a capacity of 315 MW. This project is currently going through the early stages of construction. (WDY)