Jakarta Struggles to Cope With Rapid Growth
For a lesson in the promise and pitfalls of Indonesia’s economic resurgence, a spell stuck in traffic on Jalan H.R. Rasuna Said, one of the main thoroughfares here, is as good a place as any. The glut of idling new cars tells one part of the story: strong growth. The Indonesian economy, the largest in Southeast Asia, grew 6.1 percent last year, and domestic consumption is increasing. Indonesians bought 286,000 cars in the first four months of this year, according to the Indonesian Automotive Association — 16 percent more than in the same period last year — and it can feel sometimes as if they have all congregated in one place.
But the country’s infrastructure has not caught up. A dedicated bus lane relieves some of the pressure from commuters, but heavy rain frequently floods the road. Along the middle of the street, abandoned concrete pylons stand as memorials to a plan to build an urban monorail system, initiated in 2004 but left languishing after funding difficulties and legal disputes among partners. For businessmen like Stefanus Sulimro Lim, who runs a midsize freight forwarding company, Global Abadi Perkasa, it is a worsening headache. Clogged ports, potholed roads and persistent gridlock mean extra costs in the form of blown truck tires, broken shafts and wasted time. “About 10 years ago, one truck could go to two places,” Mr. Lim said of work in Jakarta. “Our truck could go to one customer, do their stuff in two or three hours, then we could truck back to the port and do another job, all in the one day.”
These days, he said, trucks must be sent to the port of Jakarta the night before just to get one job done. Mr. Lim’s frustration contrasts with international investors’ enthusiasm for Indonesia. Considered only a few years ago as a regional laggard, Indonesia is fast becoming a darling of financial markets. Foreign investment in the country rose 52 percent in 2010, to $16.2 billion, from the level of the year before. The credit rating agency Standard & Poor’s raised its sovereign debt rating for Indonesia to BB+ last month, becoming the last of the three big agencies to rate the country one peg below investment grade.