Financializing Infrastructure in Indonesia: Hybrid outcomes of Market-led reforms

Authors: Dimitar Anguelov*, UCLA
Topics: Economic Geography, Urban Geography, Asia
Keywords: financialization, infrastructure, public-private partnerships, state owned enterprises
Session Type: Paper
Day: 4/10/2018
Start / End Time: 12:40 PM / 2:20 PM
Room: St. Charles, Marriott, River Tower Elevators, 41st Floor
Presentation File: No File Uploaded


The critical need for advanced and emerging economies to develop infrastructure in order to maintain competitive advantages and sustain growth has become common refrain in policy circuits, as Public-Private-Partnership (PPP) models are circulated and institutionalized across the globe, and buttressed by global finance. Financialization scholars have examined the financial technologies and practices deployed to secure investor returns while also circumventing political processes and democratic accountability, as well as the roles of local administrators and intermediaries in shaping financial deals. The budding financialization literature, however, has tended to take for granted the regulatory regimes and political-economic contexts through which these processes take place, focusing primarily on case studies from the global north. This empirical embeddedness also overlooks the constellation of actors and power dynamics at play. In democratizing Indonesia, new mechanisms for project development and financing have been implemented with the financial support, expertise and interests of multilateral development banks, and underpinned by a regulatory framework aimed at enabling the privatization and financialization of infrastructure assets. Yet, while the central state is assuming increasing risks and costs under this emergent infrastructure regime, private sector actors are not the only beneficiaries. Rather, the expanding infrastructure debt market catalyzed by the newly established infrastructure funds has also presented opportunities for State Owned Enterprises, blurring boundaries between public and private sectors, and drawing our attention to the role of the state not only as market regulator but as active market participant.

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