Indonesia

Indonesia Country Profile

Rural Transport and Development: The Country Context

Indonesia is a country comprising more than 18,000 islands in a range of more than 3,000 miles from east to west, with the majority of the population highly concentrated on a single island which is Java. Infrastructure has played a key role in driving growth and poverty reduction in the 30 years prior to the 1997 Asian financial crisis.  Since the crisis Indonesia has reduced development spending and its infrastructure has suffered as a result. To avert a major infrastructure crisis additional infrastructure investments of about 2% of GDP are required in the medium term.

National plans now take into account the transport sectors importance and the government has improved the road network. However a major problem in the countries current development is poor accessibility and mobility between rural areas or between rural and urban ones. This makes distribution. This results in difficulty for goods and services to penetrate village centres, let alone to reach outlying rural areas. A national survey (World Bank, 2009) of services at the desa (village) level showed that roughly 11 million people (5% of national population) were not reached by the road network and that an additional 6 million people lack any reliable connection to the motorised transport network.  These people are mostly among the poorest in the country and they live in some of the most disadvantaged areas.

In Indonesia there are more than 10,000km of navigable waterways among 50 river systems. Some infrastructure improvements have been carried out, however because of the high seasonal variation in the water level of many rivers, without further investment for improvements of crucial sections, the role of inland waterway is relatively minor, and limited to certain areas of the islands Sumatra and Kalimantan. Waterways can be an important mode of rural transport in Indonesia especially in areas away from the main island that have poor road networks.

Overview of Indonesia’s Transport Sector

Transport Subsectors:

All transport modes play a role in the countries transport system and are generally complementary rather than competitive. For many remote and isolated areas, availability of basic road transport services is a prerequisite for reducing poverty and providing access to health and education services, information and markets. Densely populated Java accounts for 26.8% of the road network.

Roads:             Length of roads total: 437,759 km (Word Bank, 2008)
                        Length of roads paved: 258,744 km (CIA World Factbook, 2008)
                        Length of roads unpaved: 179,015 km (CIA World Factbook, 2008)
Railways:        Length of railways: 5,040 km (World Bank, 2009)
Waterways:    Length of waterways: 21,579 km (CIA World Factbook, 2008)

Road Classification System

1. Arterial Road Network: Public roads to serve as the main transportation for long trips where you can travel at high speed.
2. Urban and Intra-Urban Road Network: Connects provincial capitals.
3. National Road: Roads that are under the responsibility of Central Government. Developed using the national budget.
4. Toll Roads: Pay per use roads.

Institutional Framework for Sector

Central government has given a strong lead in expanding and developing the transport network. There are two key central government actors in the road transport sector:

Ministry of Settlements and Regional Infrastructure (MSRI):  Has primary responsibility for setting national policies, standards and guidelines; for managing the development and maintenance of the road network and for the development and management of toll roads.

Ministry of Communications (MOC): Has primary responsibility for setting national policies, standards and guidelines relating to the use of public road infrastructure and to the provision of road based public transport services.

The Indonesian Forum Group on Rural Transport and Development (IFGRTD): Was established as a means for harnessing the enthusiasm for knowledge generation and sharing which has been generated at these events, and carrying it forward as a commitment to future networking activities.

Indonesian National Forum Group: A forum for the provision and sharing of knowledge on rural transport infrastructure, service and technology. This has provoked discussions about how to encourage greater community participation in transport planning, implementation and evaluation. The culmination of workshops saw the declaration of the “Jogjakarta Initiative For Rural Transportation”, a set of common principles and understandings upon which rural transport in Indonesia should be based.

Centre for Transportation and Logistics Studies (PUSTRAL): Situated at Gadjah Mada University, it is a research centre for transportation and regional development. Its objectives include conducting research on regional development and transportation as well as developing transport management strategies based on available modern approaches and appropriate technologies.

The Indonesian Forum Group on Rural Transport and Development (IFGRTD): Established as a means for harnessing the enthusiasm for knowledge generation and sharing which had been generated among rural transport stakeholders.

Relevant Rural Transport Programs

Governance Reform Initiative in Transport Sector Project (GREAT Project): The Government of Indonesia recognises that poor transport infrastructure and services are constraining the economic and social development of rural areas and impeding its efforts to alleviate rural poverty. This project requires local governments to play an active role in infrastructure assessment and procurement and to  create smaller scale PPPs (public-private partnerships). The project also puts an emphasis on strengthening the capabilities of central and local government agencies and on educating the domestic and international private sectors in the importance of proper training in developing rural infrastructure networks.

IFGRTD Projects: Ongoing and recent projects include “Economic Measurement of Rural Transportation Development” which has developed a methodology to assess the economic benefit of rural transport development and “Information Technology and Sustainable Rural Transportation” which uses remote sensing and GIS database for rapid assessment rural transport infrastructure reconstruction.

National Program for Community Empowerment in Rural Areas (World Bank): A loan from the World Bank will support expansion of this project from its current geographical coverage of 2,864 rural sub-districts (kecamatan) to approximately 4,371 rural sub-districts thus scaling up the projects poverty impacts.

The use of self help for low volume road construction: This took part on the island of Flores in East Indonesia – one of the poorest and least developed regions in Indonesia. Since 1985 Intercooperation has assisted the Catholic Church of Manggarai in constructing district roads using  low-cost labour based methods. In 1994 the project started an additional component with the goal of supporting traditional self help efforts of the communities in building village roads and motorable tracks. Key measures included training and follow up of local foremen and surveyors and technical and financial assistance for difficult road sections that were beyond the villagers’ capacity. The total cost of these roads amount to little more than US$3,000 per kilometre.

“Buy the Service” (IFGRTD): In 2003-4 the Centre for Transportation and Logistics Studies (under the IFGRTD) developed a system called “Buy the Service” for rural waterways. The objective of this system is to achieve high quality service in remote areas with reasonable price (by encouraging competition among the operators). This is achieved by tendering a system of water transport based on quality service provided by operators to customers.

Challenges to Rural Transport in Indonesia

The key challenge for rural transport in Indonesia remains improving access for the remote communities. Although the nature of the country means that coastal shipping and inland waterways play an important role, the increased coverage of transport services is achieved primarily by extending the road network. The main problem is that marginal costs of providing the infrastructure become much higher for remote locations. Operating costs also tend to be well above average in remote rural areas so improved services may be difficult and costly to sustain.

There are opportunities to directly generate local employment in poor areas by adopting labour based technologies. Given the high costs, these development investments also require a strong political commitment.

Key Documents

http://www.pustral-ugm.org/en/  - The Centre for Transport and Logistics Studies Indonesia
http://www.pu.go.id/  - The Ministry of Public Works   

Key Contacts

Information on PUSTRAL - pustral-ugm@indo.net.id

Indonesia NFG Page
Asia Pacific Region