Minister of Finance Sri Mulyani Indrawati conveyed that the need for total national infrastructure investment for the period 2025 to 2029 is estimated at around 625 billion US dollars.
According to him, the government budget, both central and regional, is only able to cover about 40 percent of these needs so that there is a fairly large financing gap.
"This requires the participation of the private sector, support from various partners, as well as the creation of innovative financing mechanisms," he explained at the international conference on infrastructure, Thursday, June 12.
Sri Mulyani said that this domestic priority also intersects with the increasing global pressure as is known together, where global conditions are currently met by continued geopolitical tensions, resulting in fragmentation and instability between countries and territories.
Sri Mulyani added that the future global economic outlook shows an unfavorable trend based on the projection of the Organization for Economic Co-operation and Development (OECD), the growth of global Gross Domestic Product (GDP) is expected to decline from 3.4 percent in 2024 to only 2.9 percent in 2025.
Then, the World Bank in its latest report two days ago predicts that global economic growth in 2025 will decrease by 0.4 percent, to only 2.3 percent.
Sri Mulyani emphasized that this economic weakening, coupled with the increasing risk of climate change, will be a big challenge for countries in planning and executing infrastructure development.
"The World Meteorological Organization has also issued a warning that global temperatures could hit a record high in the next five years. This will exacerbate environmental and socio-economic vulnerability," he explained.
According to him, the climate change is estimated to cause around 260 million people to change their homes in their own country by 2050.
Seeing this situation, Sri Mulyani emphasized the importance of infrastructure development that is resistant to climate change because extreme weather, energy transition, and environmental degradation demand a new approach that not only focuses on physical development, but also integrates the long-term sustainability principle.
He added that infrastructure absorbs about 60 percent of the world's raw materials, so sustainability needs to be implemented thoroughly from the planning stage to the implementation.
In addition, Sri Mulyani said, the aspect of social justice must also be an important part of designing infrastructure projects so that development is truly inclusive and has a broad impact on society.
"We are now in an era where social justice, transparency, and accountability are no longer an option, but rather a must. Infrastructure must be inclusive, bridge the gap not only between regions, but also between community groups. Therefore, current infrastructure is no longer just a matter of building roads, ports, or cities. Infrastructure now has to connect development with impact," he said.
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According to him, sustainable infrastructure must be able to meet two main goals, namely designed with the resilience of climate change and responsibility for the environment, as well as producing benefits that are inclusive and in line with sustainable development goals.
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