Indonesia needs better connectivity across the nation and better infrastructure to facilitate a shift from a pattern of resource-driven growth to a knowledge-based growth process, geared towards high productivity and innovation.

This sector assessment documents ADB’s current overview of the transport sector of Indonesia and the strategic investment priorities of the government. It highlights sector performance, priority development constraints, government plans and strategy, past ADB support and experience, and other development partner support.

With transport issues and infrastructure investments having gained greater attention, the country’s National Medium-Term Development Plan for 2015–2019 highlights infrastructure development for connectivity and accessibility, enhancing the maritime sector, integration of remote and frontier regions, shifting transport from road to rail and shipping, and tackling urban mobility.

To avoid the middle-income trap, Indonesia needs to shift from a pattern of resource-driven growth, dependent on low-cost labor and capital, to a knowledge-based growth process, geared towards high productivity and innovation. To achieve this it needs better connectivity across the nation and better infrastructure through innovation and improving human resources.