Indonesia’s Infrastructure and Inclusive Economic Growth

This chapter examines if infrastructure – as an exogenous variable – is a vital source of inclusive or quality economic growth in Indonesia. This inclusive formulation combines the Solow growth model, Harrod-Domar model, Keynes's identity equation, and Cobb-Douglas model. It also examines if infrastructure helps achieve the Sustainable Development Goals to reduce the economic gap, poverty rate, and open unemployment and increase efficiency for the freer flow of goods and services, making Indonesia more attractive for foreign direct investment inflows. It concludes by examining the geopolitical and geoeconomic elements of infrastructure financing, featuring China’s Belt and Road Initiative.