Tuesday, November 8, 2011

This is What Happens When You Don't Spend on Infrastructure

From the FT:


Rows of cargo containers clutter the tarmac outside an overflowing warehouse at Jakarta’s airport where there are not enough landing slots for all the planes. The chaotic scene offers the most graphic illustration of how strong economic expansion is straining Indonesia’s worn out infrastructure just as it emerges, once again, as a regional power.

The young democracy of 240m may be booming, but the situation at the capital’s airport epitomises one of the biggest problems holding back south-east Asia’s largest economy: its roads, ports, power plants and bridges have fallen far behind its needs because of years of government underspending.


2 comments:

Dragonchild said...

At least they pay lower taxes (about 17% of GDP vs. 25% for USA). . .

Meanwhile, some buyers, likely in America, are steamed because they can't get parts.

Sorry, I can't find my violin. I think it shrunk in the wash.

James E. McMillan said...

Actually most don't pay taxes at all because they are either too poor or they bribe their way out of paying. Corruption is a huge problem in Indonesia. It permeates everything. I spent a good amount of time there in the past four years and while the upper end is doing very well, and the people are very motivated, everything has an "angle".