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 infrastructure now?

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tom
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PostSubject: infrastructure now?   Fri Apr 10, 2009 12:31 am

Wonder what people think will happen with the infrastructure projects that were supposed to be happening around Lombok in response to the Emaar project. I heard alot of talk about widening roads, new power plant, and of course the new airport. What will happen to these if Emaar really does back out. How does the government expect to support a new airport without the diversion of middle eastern passengers to stop over in Lombok and the increased high end tourism associated with the Emaar project. Roads and power would be great for the local population and without the project the locals would actually get the benefits of these improvements.
Not to pat myself on the back...but I predicted a problem between Emaar and the short sighted, hungry authorities. Then the financial situation came into the picture when Emaar lost 80% of it's stock value. I would think that they will at least put things on hold for a while to try to recover some of their capital. Meanwhile the Indonesian authorities have no interest in that because they will probable be out of office at that time and will have nothing to gain from the venture.
Of course I am with the other readers who would rather see slow manageable growth. I never thought the project would improve the standard of living for most of the average population. Rather it would make it worse in many ways.
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outahere
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PostSubject: Re: infrastructure now?   Fri Apr 10, 2009 10:26 am

Was the new power plant ever intended to service the local people? I think not. In other developed areas of Lombok, hotels are on a separate grid to the local villages. While tourists chew up the power, locals sit in the dark with rolling black-outs. And they are the lucky ones who have a power meter. The current waiting list for a new power connection in the Mangist area is two+ years. If the same situation occured with any new plant (which it no doubt would), I don't see how the proposed new power plant would benefit the locals at all.

There are massive infrastructure challenges that face the Emmar project, including the fact that Lombok's south is a very arid place. I think the government was hoping that others would tip money into the whole deal to address how the water will be supplied to the hotels and villas. Perhaps a large de-sal plant? But that requires a massive amount of electricity... and what to do with the waste product? Put it in the ocean like all the other rubbish in Lombok? Oh dear, now the sea grasses are dead and the place is no longer crystal clear water and desirable to visit.

And if the current VP is not returned in the elections, will the whole project lose it's champion and quitely fade away
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Josi
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PostSubject: Options available for the government to invest in infrastructure improvements in Lombok.   Sat Apr 11, 2009 9:48 am

Indonesia a country with the largest Muslim population in the world is one with a low GDP compared to many of the small but developed western countries and even some of her neighbors.

Foreign domestic investment in tourism will not develop a large tax base. The beneficiaries will be the tourists.

If the government in Jakarta borrows money from UN organizations like the World Bank, for investment in infrastructure, they will have to repay the loan and the only way is if there is a large tax base that will benefit from the investment. If the investment is limited to transportation and lodging for tourists, the government will not be able to generate enough revenues. The planned new airport is not likely to justify huge hard currency borrowings.

When you drive through Ampenan or Mataram, you can see lot of High School kids in uniform. However, I suspect most of the children among the three million residents of Lombok, live in rural areas with no access to High Schools.

Some 40 years ago in the state where I was born in India, the state government (comparable to Nusa Tenga Barat) introduced a “mid-day meals scheme” for the poor children. Initially the state was able to provide rice and lentils. Then they could afford one egg per week and soon thereafter managed to provide eggs every day.

All the poor children managed to complete at least High School. The standard of education also improved because the state recognized the future potential. Now a poor villager will take a short term bank loan to educate his daughter/son to become an IT engineer. Loan repayment burden thus shifts from the parent to the next generation. This is a dramatic change compared to the past because in the olden days, the villager will sacrifice meager savings for paying the dowry for the daughter.

If I were the Governor of NTB in Lombok, I will think long term and start paying attention to the human capital in Lombok. Lombok children need to have solid High School education and receive additional training to qualify for higher paying jobs.

There could be an immediate argument that there are no higher paying jobs in Lombok. Some of the trained students can learn to invest in the local resources. Instead of exporting cheap labor that is often abused in neighboring countries, they can export agricultural products that are in heavy demand outside (e.g. raising strawberries in higher elevations near Rinjani, bell pepper in the plains etc.).

Once there is a large base of skilled people, they can earn higher wages and pay taxes also. Once educated, their awareness of the linkage between wealth and rule-observing citizens, can also improve. Lombok administration should invest in the human capital

Josi
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outahere
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PostSubject: Re: infrastructure now?   Sat Apr 11, 2009 11:29 am

I couldn't agree more Josi.

One of the big issues I believe is the government's inability to understand or commit to such an idea. Either through lack of education, vision or foresight themselves, or because this type of investment is not self-serving and there is very little direct return to their pocket. As opposed to a project like Emaar's, who have hinted that part of the reason for their withdrawal is the amount of under the table money that is being demanded on all levels of government.

The immediate lack of higher paying jobs in Lombok should not be a deterent. Look at India - who would have thought 40 years ago that they would have such a strong hold on IT services and phone centres? Some very clever people with vision and foresight saw an opportunity and have created a whole industry that pays a whole lot better than farming. And industry that uses their human capital without polluting the environment!
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