Abstract

Recently there are a number of symptoms indicating that Indonesia could struggle to escape from the “middle income trap” without new growth engines and wide ranging structural reform. Most of all, the insufficient physical infrastructure is a primary constraint to economic growth in that the infrastructure gap raises costs, discourages investment, and reduces opportunities to participate in the growth process. The costs of logistics across Indonesia account for some 26 percent of GDP higher than in neighboring countries. Indonesia has the potential to rise and become more thriving and equitable. But the risk of floating in the middle is also real. Since his presidential candidate, Jokowi has outlined an ambitious maritime doctrine, which later developed into ‘Global Maritime Axis (Poros Maritim Dunia)’. Jokowi hopes to make Indonesia move up to upper middle-income bracket through the vision. Also, in December, 2014, Jokowi unveiled his medium-term economic agenda including massive infrastructure projects. The paper discusses the key challenges faced by the Jokowi administration in its implementing the global maritime axis vision and the infrastructure development plan.

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