From toll roads to railway to the newly opened LRT, South Sumatra is experiencing a boost in infrastructure development. With Palembang being one of the host cities for the Asian Games 2018, President Joko Widodo’s government expects the transport network, especially in the large cities to push economic growth in the province and improve its competitiveness. The newly built transport infrastructure will also help accelerate the development of Special Economic Zones in Tanjung Api-Api and Tanjung Carat. The development of the SEZ’s will create new jobs and act as an economic driver for South Sumatra.

It is no secret that Indonesia has the highest logistics costs in Southeast Asia. President Joko Widodo has emphasized that his administration is committed to lowering logistics costs to improve the country’s economic competitiveness. Given that South Sumatra is an emerging economic hub with strong agricultural, mining, plantation, fisheries and manufacturing sectors, improving the province’s logistics sector is critical for sustained and equitable economic growth. Palembang has now more than 30 flights a day but needs to upgrade its port and rail network, now underway.

Agriculture plays a vital role in Indonesia’s economy, particularly in supporting rural household income. The sector is a major employer, accounting for nearly 32% of jobs in 2017. The agriculture sector is made up of primarily large-scale plantations owned by private and state-owned companies and smallholders using traditional farming methods. South Sumatra has the largest rubber plantations in the country, amounting to 812.7 thousand hectares. The province however needs new investments in the agriculture sector, especially in the downstream processing industries.

Palembang’s property sector is expected to receive a major boost as new investments, both foreign and domestic, are rising. The development of the Tanjung Api-Api Special Economic Zone has changed the entire economic outlook for South Sumatra. The completion of the first phase of the Palembang LRT will also have a positive impact on the city’s property sector. Analysts have predicted that property prices could rise by as much as 20% per year for the next few years on the back of infrastructure development.