There's no such thing as a free lunch...Or is there?

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It's official. The next president of Indonesia is former army general Prabowo Subianto. Quite how the next five years will pan out is anyone's guess but hopefully the foreign pundits who always bring up his dodgy human rights record will be proven wrong. Nonetheless, on policy making, Prabowo's popularist move to literally offer the poor 'a free lunch' every day of the week does not augur well for the future. Such a policy - if it ever came to fruition - would cost a phenomenal amount of money and likely lead to huge inefficiencies (food waste) and poor incentives (make people lazy). Another concern is Prabowo's strong nationalist bent. Thus, in the possible event that he finds himself with his back against the proverbial wall in the face of stern economic challenges, there is a big chance that he will simply scapegoat foreigners. But he will have to be careful. Construction of the new capital city, Nusantara, for example, is highly dependent on foreign in

The Selat Sunda Bridge

After writing about long distance bus trips in my previous post, I was interested to come across the largely unreported news that a Presidential Decree (Peraturan Presiden or Perpres) has been issued which gives the go-ahead for what will be the most ambitious construction project ever undertaken by Indonesia: the 29 km long Selat Sunda Bridge linking Java to Sumatra. 

So long is the planned bridge that it makes the recent construction of the Rp5,438 m Suramadu Bridge that links Java to Madura look like a little kid’s meccano project.

Selat Sunda Bridge But like all grand undertakings, the Selat Sunda Bridge doesn’t come with a low price tag and will cost an estimated Rp100 trillion (around US$10 billion) to build (or more than 20 times the Rp4.5 trillion it cost to build the Suramadu Bridge!) 

To put this number into perspective it amounts to a phenomenal Rp1.05 million for every working person in this country (based on a 95 million strong workforce) and is about twice the entire state budget for education in 2010 of Rp 51.8 trillion! 

So is this nationalistic folly or economic sense? 

Well, according to the Presidential Decree, the project will be government managed although private contractors will also be brought in. The feasibility study for the bridge has already been done – and interestingly enough by a company called PT Bangungraha Sejahtera Mulia (BSM), one of the companies in the “well connected” Artha Graha Network (AGN). 

The sheer size of the project means potentially huge profits for certain parties and when you consider that up to 50 percent of public works funds in Jakarta are said to be used “inappropriately” (explaining why Jakarta’s roads are in such a shamefully poor state) it is little wonder the project is being pushed so aggressively. 

Key to the project’s success is funding. Where will it come from? But if the “in limbo” Jakarta monorail project is any guide, the bridge may never even be built anyway! 

Note: Among the longest bridges in the world are the Seven Mile Bridge in the US, the King Fahd Causeway, the 13.5 km Penang Bridge in Malaysia, and the incredible 32.5 km Donghai Bridge (literally “East Sea Grand Bridge”) in China.

32.5 km Donghai Bridge (literally “East Sea Grand Bridge”) in China The Java-Sumatra bridge? I’ll believe it when I see it.

Comments

  1. you are absolutely right - as made evidently clear by the disasters in the last few days - earthquakes, tsunami, floods, volcanic eruptions - we've had it all!

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