Kuntoro Mangkusubroto, Head, Presidential Delivery Unit (PDU): Interview

Interview: Kuntoro Mangkusubroto

What are the strategic priorities in securing improved economic conditions for the country, and how will these be implemented?

KUNTORO MANGKUSUBROTO: The PDU was established in 2009 to address the lack of delivery of infrastructure projects and poor coordination between ministries. Our focus for 2012 has to be on improving the overall infrastructure of the country.

When it comes to attracting investment, Indonesia has a number of competitive advantages over other countries in the region, such as low labour costs. However, costs related to infrastructure such as road transportation, logistics and handling, mean that our competitive advantages are effectively cancelled out. For this reason, we believe that the current lack of infrastructure is the single greatest barrier to achieving greater economic development.

Attached to the presidential office, the role of the PDU is to establish the list of national priority programmes and to watch over the execution of projects taking place to ensure their timely completion. The unit actively participates in the overseeing of key infrastructure developments such as toll roads, seaports, airports, electricity, waste management and water treatment. If an infrastructure project gets stalled, for whatever reason, the PDU will immediately step in to put it back on track.

What are the main objectives of the Master Plan for the Acceleration and Expansion of Indonesian Economic Growth (MP3EI)?

KUNTORO: The MP3EI provides a clear road map for developing the economy through six specific corridors. The plan brings existing opportunities together into a single integrated programme with the aims of securing large mid- and long-term investments, producing sustainable economic growth, creating jobs and eradicating poverty in the country.

Investors and economists have identified land acquisition as the single greatest impediment to infrastructure development. It is therefore our responsibility to assist in making land acquisition procedures simpler, which would boost the construction of key infrastructure works such as roads and power plants. This, in turn, would augment Indonesia’s economic growth.

Overall, the concept of the MP3EI is a good initiative, but it demands an implementation strategy to be successful. The PDU will have to intervene to ensure that projects are executed. The key problem is the overlap between regional and central government regulations, which has made the implementation of development projects very complicated.

Regional autonomy has produced several different levels of contradictory regulations, making it difficult to know who the final decision maker is. We need to take a pragmatic approach in dealing with overlapping authority and improving coordination.

We have already implemented measures to positive effect, although much more needs to be done.

How do you respond to the claim that the moratorium on deforestation will have little impact?

KUNTORO: The complaints about this moratorium are not directed at the concept or the policy; as is often the case, criticism concerns the policy’s lack of enforcement. With this moratorium we are moving away from a system where primary forests are converted to plantations while more than 30m ha of degraded land are left unutilised. The new policies mean that sufficient land will be available for the future growth of important Indonesian industries such as agriculture, palm oil, rubber and forestry.

By making use of degraded lands we are protecting our forests while ensuring sustained and increased economic activity in the future. The two-year suspension will give us time to solve issues such as spatial planning and land tenure, which will allow for more sustainable management and development of Indonesia’s rich supply of natural resources.