Connectivity Development Policy Loan 2

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The Second Connectivity Development Policy Loan Project (Connectivity DPL-2 ) in the Republic of Indonesia is aimed at supporting the government's reform agenda on enhancing domestic connectivity amongst the different islands of the archipelago and to further strengthening Indonesia's global connectivity are crucial to the realization of Indonesia's development objectives. Connectivity will unleash the growth potential across various economic corridors, connect lagging regions with urban growth poles to share prosperity, and reduce poverty by increasing opportunities. Improving connectivity is also crucial if Indonesia is to gain the most from the process of regional economic integration. Improved connectivity will increase Indonesia's capacity to respond to opportunities, boost cost competitiveness of businesses, and strengthen its attractiveness to investment. The Connectivity DPL-2 Project policy actions surround the following pillars: i) strengthening national coordination and regulation through establishment of regulatory and institutional frameworks for improved coordination and implementation of the connectivity agenda; ii) strengthening intra-island connectivity through improved connectivity among and between growth poles, with improved regulatory framework for land acquisition for public purpose development and optimal use of resources for sustainable improvement and maintenance of island transport network; iii) improving inter-island connectivity through strengthened ICT connectivity between eastern and western Indonesia and more competition in broadband services, and improving the efficiency of domestic shipping which is crucial to lower logistics costs in an archipelago like Indonesia; and iv) improving international connectivity (trade facilitation) by strengthening the institutions and processes in handling traffic and trade volume.