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NEWS UPDATES Asean Affairs        2  June 2011

Infrastructure saturated in Indonesia

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Bank Indonesia Governor Darmin Nasution says the Indonesia's infrastructure is operating at almost full capacity, which will likely result in lower-than-expected growth next year.

Darmin said the existing infrastructure was already operating at capacity in supporting the country's economic activities, which meant that only a "breakthrough" in infrastructure development could support further economic growth.

"We note that [Indonesia's current infrastructure] is almost operating at full capacity, so it's not easy to improve the existing growth. This is not just about industries, but its about infrastructure in particular," Darmin said Wednesday after a meeting with lawmakers discussing preparations for the drafting of the 2012 state budget.

This situation would mean that even an increase in investment in Indonesia would not likely do much to improve its gross domestic product, Darmin said.

He recommended for the government to make a breakthrough in infrastructure development, to prevent Indonesia's growth from being stunted.

"If we make a breakthrough, namely through the improvement of strategic infrastructure, for example by improving access to Tanjung Priok seaport, we can still actually [boost growth]," Darmin said.

Earlier, he told lawmakers he disagreed with the government's proposed 2012 economic growth target of between 6.5 and 6.9 percent, saying it would likely be lower.

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This year in Thailand-what next?

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By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

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