Infrastructure Investment in Indonesia: A Focus on Ports, edited by Colin Duffield, Felix Kin Peng Hui, and Sally Wilson.

AuthorNegara, Siwage Dharma

Infrastructure Investment in Indonesia: A Focus on Ports, edited by Colin Duffield, Felix Kin Peng Hui, and Sally Wilson. Cambridge: Open Book Publishers, 2019. Pp. 396.

The book Infrastructure Investment in Indonesia: A Focus on Ports--an outcome of a research project jointly conducted by the University of Melbourne, the University of Indonesia and Gadjah Mada University--compares and contrasts some major infrastructure projects in Indonesia and Australia. The special focus of this edited volume lies on the study of port infrastructure projects.

While some readers could argue that such a comparison is not fair, given the disparity between the two economies, the perspective employed in this publication is useful to understand how different investment regulations can lead to very different outcomes in port development.

The book begins with a short introductory chapter that describes the Indonesian economy and its pressing infrastructural needs. The next three chapters highlight the country's overall infrastructure challenges, from planning (Chapter 2), to financing (Chapter 3), to efficiency (Chapter 4) constraints. The remaining eight chapters are exclusively devoted to ports and their development. The analysis is supplemented with stakeholder surveys, focus group discussions and expert interviews.

Port development plays a vital role in strengthening a country's international competitiveness. In fact, inefficiency in the port industry can be held responsible for a nation's poor trade performance and, indirectly, for hampering its rapid integration into global value chains.

One of the key challenges faced by port business operators in Indonesia is the prevalence of deep-rooted corruption in the sector (Chapters 2 and 8). The vast majority of survey respondents (who are mostly employed in port operations) cited corruption as the most significant deterrent to port development in the country. In this regard, one of the survey participants highlighted the issue of "too many interested parties wanting a slice of the action" (p. 216). It is well established in economic literature that corruption not only reduces a sector's efficiency by distorting resource allocation but also hiders the inflow of investments into the sector. To make matters worse, the entrenched corruption in port operations is also related to the second biggest problem mentioned in the survey--Indonesia's inefficient and excessive bureaucracy. The authors argue that there are too...

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