Pink Fire Pointer The Effect of Infrastructure (Transport) to The Economic Growth

The Effect of Infrastructure (Transport) to The Economic Growth

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The development of infrastructure to economic development has a close relationship and interdependence with each other. repair and improvement of infrastructure in general will be able to increase the mobility of people, the creation of drop shipping the goods, the presence of the transport of goods with higher speeds, and improved quality of services such transportation.

At this crucial infrastructure problems to be addressed on the agenda of local government, because the infrastructure is a major determinant of the sustainability of development activities, such as to achieve economic development targets both qualitatively and quantitatively. In the short-term infrastructure development will create jobs in the construction sector medium and long term will support increased efficiency and productivity related economic sectors. So that infrastructure development can be considered as a strategy to encourage economic growth, poverty reduction, improved quality of life, increased mobility of goods and services, and can reduce the cost of domestic and foreign investors (Marsuki, 2007).
The relationship of infrastructure to economic growth is directly infrastructure provides benefits to households (household) and also much enjoyed by the company which led to economic growth and ultimately provide welfare Prud'homme (in Briceno et al, 2004).

The linkage between the infrastructure (transport sector) with partumbuhan economic context of government spending (Government spending) transport sector in accordance with the Theory Keyles (in Gardner Ackley, 1961) states that the activities of government seeping into all areas of assuming a closed economy, where Y is economic growth, C is consumption, G is the volume of government spending, and I is investment. 

Systematically have the identity as follows: Research on the effects of public investment in infrastructure (in this case the transport and communications) on the growth made by Easterly and Rebelo in 1993. Using assessment as a helper variable to avoid linking the two endogenous variables and the possibility of reciprocal causal relationships. With the pool method of regression, found that public investment in infrastructure has always been a positive relationship with relatively high coefficients of between 0.59 to 0.66 on the growth.
In encouraging the development of infrastructure, the government as a major player in the infrastructure sector should maintain the sustainability of development investments in infrastructure and prioritize infrastructure development plans, so the infrastructure can be improved both in quantity and quality. Infrastructure development should involve the private sector and communities to achieve sustainable development. There must be a right combination between large and small scale infrastructure to achieve the target income distribution and poverty reduction. For that we need a more integrated approach in infrastructure development from planning to service to the community, to ensure synergy across sectors, regions and territories. In more detail the provision of infrastructure to economic development are: (Basri, 2002).
1. Accelerate and provide the necessary goods.
2. Availability of infrastructure will enable the availability of goods for more people with a cheaper cost.
3. A good infrastructure can facilitate the transport which in turn stimulates the stabilization and reduce the price disparity among regions.
4. Infrastructure that facilitate the transport services led to the production areas can be transported and sold into the market.