Indonesia has 15 major cities with over 1 million inhabitants. Public transport in these cities is scarce and unreliable, with a low usage rate (5%-20% of trips). Hardly any consideration is given to non-motorized transport. Cities need to enhance their technical expertise to plan, design, implement, and operate public transport systems; increase the funds to develop mass transit systems; and strengthen institutional capacity to integrate transport and spatial planning more closely.
Indonesia has experienced a drastic rise in motorized transport over the last two decades, caused by subsidized fuel, rising incomes, and low interest rates for vehicle loans. In combination with the limited infrastructure, rapid motorization exacerbates the adverse environmental impact of transport: the sector currently accounts for 70%-80% of all outdoor air pollution in the country (including particulate matters), and 23% of greenhouse gas emissions.
Low transport infrastructure performance and capacity is one of the most critical barriers hindering Indonesia's competitiveness and fueling social inequality across the archipelago. Indonesia ranked only 63rd in the 2016 Logistics Performance Index. The country's global ranking has decreased ten positions since 2014, mainly due by the deterioration of its infrastructure—one of the worst within the Association of Southeast Asia Nations countries (ASEAN), and far behind its closest neighbors such as Malaysia or Singapore.
Enhancing private sector participation and limiting the role of State-Owned Enterprises to foster a more competitive environment.
Implementing these strategies will require strong commitment and effective collaboration at all levels of government: central, provincial, and local. From urban transport to maritime networks and road infrastructure, the World Bank is working actively with the government of Indonesia to make this happen.