Japan to invest in Indonesian urban development

Featured - October 9th, 2012

Japan is set to pour in investment to Indonesia under an agreement to develop the capital city, The Nikkei reports.

The two governments are expected to forge the deal Tuesday in a meeting between Japanese foreign minister, Koichiro Gemba, its trade minister, Yukio Edano and Indonesia’s coordinating minister for economic affairs, M. Hatta Rajasa, on the sidelines of the annual meetings of the International Monetary Fund and World Bank in Tokyo.

Japan will likely spend 3 trillion yen through 2020 on 45 projects, mainly on the construction of roads, railways and other infrastructure, Japan International Cooperation Agency estimates.

The comprehensive assistance for urban development seeks to ease Jakarta’s road congestion and improve tight supply-demand conditions in energy productions. The Nikkei reports that 18 priority projects will be selected by the end of next year, including proposed high-speed rail links, a fossil-fuel plant, a new harbor and a road connecting the harbor to the city.

It is hoped, according to Japanese sources, that the agreement with Indonesia would pave the way for stronger economic ties with Myanmar and other southeast Asian countries, as well as India, and gain leverage over China’s “growing influence” in the southeast.