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  • 8/3/2019 MP3EI Jawa

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    Masterplan P3EI

    Java Economic Corridor73

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    JavaEconomicCorridor

    Development Theme: Main Economic Acvity:Consists of 4Economic Centers:

    Jakarta

    Bandung

    Semarang

    Driver for Naonal Industry

    and Services Provision

    Yogyakarta

    Surabaya

    Food &Beverage

    Texle

    Transportaon

    Equipment

    Shipping ICT

    Defense Equipment

    Greater Jakarta

    Area

    Masterplan P3EI

    Java Economic Corridor74

    Food And Beverage Industry Node

    Capital City/Economics Center

    Texle Industry Node

    Domesc Sailing Network

    Railroad

    Economic Center Connecng Lane

    Exisng RoadMain Exit Corridor LaneManufacturing Machinery and

    Transportaon Equipment Node

    Industrial Cluster

    Doc. Astra Otoparts

    Sea Port

    To Kalimantan & Sulawesi

    To Banjarmasin

    To Balikpapan &

    Samarinda

    To Sulawesi

    To Eastern

    Indonesia

    To Bali & Nusa

    Tenggara

    To PonanakTo Batam

    To the west

    of Sumatra

    Internaonal PrimaryPort ofTanjung Priok

    Internaonal PrimaryPort ofTanjung Perak

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    The main focus of the Java Economic Corridor development will be on Food and Beverage, Texle, and

    Transportaon Equipment. In addion, there is also desire to develop other economic acvies such as

    Shipping, ICT, and Defense Equipments.

    Overview of Java Corridor

    Driver for Naonal Industry and Services Provision are the main themes of the Java Economic DevelopmentCorridor. To support this, a special strategy will be implemented to further develop Java Corridor industries

    that support the conservaon of water and the environment.

    In general, Java Corridor has beer economic and social condions in relevance to other corridors. Therefore,

    the Java Economic Corridor has potenal to progress in its value chain from manufacturing based economy

    to service-based economy. This corridor has the potenal to serve as the benchmark for economic changes,

    evolving from primary-industry focus towards being more focused on terary-industry. Such value chain

    evoluon has been successfully developed in Singapore, Shenzhen and Dubai.

    There are several issues idened in Java Economic Corridor requiring aenon:

    High GDP and prosperity gap between provinces within the corridor; Growth disparity throughout the value chain; the progress of the manufacturing sector is not followed by

    the progress of other sectors;

    Lack of domesc and foreign investment;

    Lack of sucient infrastructure.

    Figure 3.C.1: The Distribuon of

    GDP per Capita at Current Prices

    and Real Growth Rates for the

    Regency/City in Java Economic

    Corridor Year 2008 Source: Province and Regency in Figure, NSA, Team Analysis

    High Income region

    Low Income region

    Growth rate

    IDR Mn

    5 year GRDP real CAGR (2003-2008)

    Provincy City:Jakarta(West)

    DKI Jakarta West Java Central Java East Java

    Bandung Semarang Surabaya(East)

    Spread of wealth

    Provinces

    GDP per capita at current price and real growth rate in 2008 for Regencies/Cies in the Java Economic Corridor

    Naonal GDP

    per capitaIDR 21.7 Mn

    Masterplan P3EI

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    The food and beverage industry is a signicant contributor to the GDP of Indonesia. In 2008, the industrialproducon value of food and beverage reached USD 20 billion, and has grown at an average of 16 percent

    every year thereaer. This industry absorbs the largest labor force among other manufacturing industries. In

    2010, this industry absorbed a labor force of 3.6 million people, an increase of 3.8 percent from 2009.

    From January to August 2010, the food and beverage industry increased its export value by 16 percent for the

    food industry and by 13 percent for the beverage industry relave to the same period in the previous year.

    Producon for this industry contributes approximately 22.3 percent of total manufacturing producon in Java

    Corridor making it the second largest manufacturing industry aer the machinery. Total realized investment

    for this industry in Indonesia at the end of 2010 was IDR 25 Trillion, in which IDR 9 Trillion of the investment

    came from foreign investment (FDI) and the remaining IDR 16 Trillion from domesc investment (DDI). This

    industry ranks the highest for the amount of domesc investments realized in 2010. In 2011, the investment

    in food and beverage is expected to reach IDR 38.87 Trillion.

    Milk is a product of the food and beverage industry that has potenal to be developed further as the

    consumpon of dairy products per capita in Indonesia is relavely lower when compared to China, Malaysia,

    and India. This can be considered as an opportunity and therefore, sales of dairy products in Indonesia are

    projected to grow by 17 percent annually.

    Although this industry has been growing in recent years, there are sll challenges in terms of infrastructure,

    human resources, and regulaons for this industry. These challenges prevent this industry to grow to its full

    potenal. One such challange that inhibits the growth of this industry is the regulaons that imposes import

    tari for food end-products made from rice our, potato, milk, and chocolate is lower than the rates of

    import tari for its raw materials. Other regulatory challenges also include the imposion of import tari or

    packaging materials. The imposion of such import tari has led to the price increase inpackaging, causing

    the high price of packaged products, such as sweets and biscuits. In terms of exports, another challenge being

    faced is the high transportaon costs whereas the margin generated by thesale of food and beverage products

    is relavely smaller.Figure 3.C.3:Consumpon of Dairy

    Products in Indonesia

    Consumpon of Dairy Products in Indonesia

    Kg per Capita

    Source: Euromonitor; Expert Interviews; Team Analysis

    Singapore Malaysia China India Indonesia

    Cheese MilkYoghurt & sourmilk drinks

    Other dairyproducts

    Source: Euromonitor; Team Analysis

    Beverage 13%

    Food 16%

    Food and Beverage

    Figure 3.C.2: Total Sales

    of Food and Beverage in

    Indonesia

    USD Bn

    Total Sales of Food and Beverage in Indonesia

    CAGR 2004-2008+16%

    1112

    1416

    20

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    Strategies required to face challenges are:

    Implement more eecve markeng to capture domesc demand, which is growing rapidly;

    Increase the use of the Indonesian Naonal Standard (SNI) and strong branding/labeling in order to

    improve regional export for high value added products.

    Regulaon and Policy To eecvely implement the above menoned strategies, several measuresneed to be taken relang to regulaons and policies as follows:

    Reform policies and regulaons in order to make foreign investment more aracve, e.g. import duty

    tari for raw materials such as for rice our, potato, milk and chocolate should be made lower than the

    tari for their end products (Ministry of Finance Regulaon No. 241/PMK.011 Year 2011 concerning

    Decision Systems Classicaon of Goods and the Imposion of Taris of Import Duty on Imported Goods);

    Review policies to lower the cost of packaging materials in order to increase the compeveness of the

    food and beverage packaging products (Ministry of Finance Regulaon No. 19 Year 2009 concerning

    Decision on Import Duty Tari Determinaon of Specic Products in order to reduce duty for raw

    materials e.g.polypropylene and polyethylene packaging).

    Human Resources and Science & Technology In order to support the development ofthe main economic acvies for food and beverage industry, human resource & technology supporng the

    industry needs to be developed as follows:

    Recruit qualied human resources from within Indonesia and abroad;

    Improve educaon and training for local experts supporng the food and beverage industry.

    The texle industry is an industry with the highest level of employment in Indonesia (it employs more than

    1.3 million people). Of the total labor employed, about half (600 thousand) work in the labor-intensive texle

    garment industry.

    Figure 3.C.4:

    Labor Employment for

    each Value Chain of

    Texle Main Acvies

    Figure 3.C.5:

    Percentage of Texle Company

    based on Company Size

    % Firms by Size

    Small scale rms

    Medium-large

    scale rms

    Employees (Thousand)

    Texleproducts

    Fabrics Yarn Fiber

    Sumber: API

    1,500

    30

    748

    1,399

    381

    240

    1,000

    1,000

    Texle

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    An important source of foreign exchange, the texle industry is the only non-oil manufacturing export industry

    with a posive net export. Texle products are Indonesias largest export commodity to the United States.

    Figure 3.C.8:

    Esmated Growth

    in Texle Industry

    IDR Tn

    Esmated GDP growth for the texle industry

    Source: Team Analysis

    CAGR

    2004-2009

    Fiber

    Yam

    Fabric

    Garment

    CAGR

    2009-2013

    Figure 3.C.6: Total

    Export and Import

    Commodies Non Oil

    Figure 3.C.7: Big

    Ten Exports to

    the U.S. Based

    on Value (Year

    2007)

    USD Bn

    Top 10 Indonesian Exports to US by Value (2007)

    USD Mn

    2,000

    1,500

    1,000

    500

    Net ExportsExports Imports

    Note: Imports expressed as negave values

    Source: WTO trade stascs, US Census Bureau; Team Analysis

    Indonesias Non Oil & Gas ManufacturedMerchandise Export and Import

    In the global marketplace, Indonesian texle exports to the U.S. and Japan are lesser than Chinas texleexports to both countries. Indonesian texles industry could benet from the policies that exist in many

    countries where they restric imports from a parcular country.

    Texle products contribuon to naonal GDP is signicant, amounng to IDR 90 Trillion in 2007.

    The amount decreased due to the economic crisis in 2009, but is expected to connue its increased

    contribuon in the future.

    Texles

    and

    Clothing

    CoonApparel

    OtherTexle

    Apparel

    NaturalRubber

    Fish&Shellfsh

    Furniture

    SporngApparel

    CarParts&

    Accessories

    Computer

    Accessories

    Crudeoil

    Televisions,DVDPlayers

    andothervideoEquipment

    Chemicals

    Oceand

    Telecom

    Equipment

    Telecommunicaon

    Equipment

    Automove

    Products

    Electronics

    Iron&Steel

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    The upstream texle industry in Indonesia sll imports 90 percent of raw natural coon materials. With a suitable

    climate for coon culvaon, Indonesia should increase coon producon and therefore be poised to improve the

    possibility of upstream integraon, maximize value added and decrease dependency on imported raw material.

    From the downstream side, Indonesia has begun to develop the garment design industry in Jakarta. Design isanacvity with high value addion, and as such, should be supported by compeve design capabilies.

    Figure 3.C.9: Total sales

    of Texle Products Up In

    the End Consumer

    2008 201220102009 20132011

    7591

    110133

    161

    1957

    +21%

    9

    11

    13

    16

    19

    16

    20

    24

    29

    35

    42212

    175

    145

    12098

    256

    IDR Tn

    Total sales of texle products to end consumers

    21%

    CAGR2008-2013

    Others1

    Arcles clothing& accessories

    Garments

    22%

    21%

    240

    280

    320

    200

    160

    120

    80

    40

    0

    1 Others includes clothing material and expenditure on cleaning, repair and hire of clothing

    source: Euromonitor; Team Analysis

    The texle industry is labor-intensive, therefore the ease of labor employment/empowerment becomes very

    important and Indonesia in this regard is currently ranked below China, India and Thailand.

    The upstream texle industry (bers into fabric) is a capital and technology intensive industry that needs

    abundant energy recources. The availability and price of electricity eects the level of compeveness of

    products produced.

    Another hindering issue is high transport costs due to the low eciency of Indonesian seaports. Ship

    turnaround me at seaports of Jakarta, Semarang and Surabaya are 67,77, and 38 hours respecvely which

    is consideredrelavely long. Turnaround mes in ports in Indonesia are much longer than in Singapore,

    which is 26 hours. Yet another hindering issue aside to those menoned above is the condion of producon

    machineries in which directly eects level of producvity. The average age of texle machines in Indonesia is

    more than 20 years resulng in low producvity.

    To develop this sector, a strategy was developed to recapture the domesc market and increase export

    valueby strengthening the role of Java as the countrys texle-producing hub. There are addional

    opportunies to strengthen its posion in the value chain from upstream (raw materials producon) to

    downstream (design producon of garment) so as to create vercal integraon and to improve overall

    compeveness.

    Most texle producon in Indonesia is concentrated in Java (94 percent), with Jakarta, Bandung, Semarang as

    major producon hubs. Upstream industries include ber producers in Purwakarta, Subang and Tangerang.

    % of Machines

    100

    80

    60

    40

    20

    0

    Age of texle related machines in Indonesia (2006)

    Source: Ministry of Industry; Team Analysis

    S pinn ing Weavi ng Knin g Fini sh ing Garment

    36

    6482

    8493

    78

    7

    221618

    Older than 20 years

    Younger than 20 years

    Figure 3.C.10: Age of Texle

    Machinery in Indonesia

    (Year 2006)

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    Regulaon and Policy To further improve the main economic acvity of texles, especially in Java,the support of regulaons and policies needed include:

    Increase bilateral cooperaon with countries imporng texles;

    A review of Law No. 13 Year 2003 concerning Labor Act to further improve business and investment

    climate, because the texle industry in general is labor intensive;

    Provide incenves for texle acvies with high added value such as design;

    Capture domesc texle market, which is projected to grow rapidly (21 percent);

    Increase monitoring of the entry of imported products (legal and illegal imports), while increasing the

    quality of naonal products to counter the market of imported products.

    Connecvity (infrastructure) The development of major texle economic acvity requires theimprovement for connecvity through infrastructure support services, including:

    Increasing electricity supply and the feasibility of electricity prices (which can compete with electricity

    prices in China and Vietnam);

    Increasing me eciency of transport (ship turnaround me) through main ports such as Jakarta,

    Semarang and Surabaya;

    Decreasing transport cost (Terminal Handling Charge), to that lower than costs in Singapore, Philippines,

    Malaysia, and Thailand.

    Human Resources and Science & Technology The development of the texle industry thatis labor and capital intensive requires measures in human resources and science & technology, such as:

    The provision and improvement of vocaonal educaon, specically in the eld of texle product design;

    Provision and support to upgrade outdated texle machinery/equipment and increasing texle producing

    technology;

    Increased technological innovaon for texle products in order to increase sales of texle products to thenal consumer, in the form of clothing (garment), or other texle products.

    There is great potential for growth in the equipment and machinery sector. More than 80 percent GDP

    contribution of this sector comes from Java Corridor.

    In the industrial sector for equipment and machinery, the transportation equipment segment is the largest

    contributor, e.g. 93 percent of equipment and machinery sector in Jakarta came from transportation

    Figure 3.C.11: Percentage

    Contribuon of Equipment and

    Machinery segment in Jakarta and

    West Java

    Percentage split within equipment

    & machinery segment1

    (%)

    Transportaon Equipment

    1Based on value added at market prices data for 2005 for each province

    source: NSA; Team Analysis

    100

    80

    60

    40

    20

    0

    Others

    Communicaon equipment

    Machinery and apparatus

    Transportaon equipment

    JakartaWest Java

    44

    93

    33

    3

    22

    41

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    Figure 3.C.12:

    Value Vehicle

    Sales

    Figure 3.C.13:

    Car Ownership

    per 1,000

    people

    CAGR

    2003-2009

    IDR Tn

    +13%

    200

    160

    120

    80

    40

    0

    Auto and motorcycles sales value

    Source: Euromonitor, Data Consult, AISI, Team Analysis

    20042003 20092005 2006 2007 2008

    27.8

    82.3

    54.561.2

    94.2

    56.573.4

    88.1105.8 Auto +12%

    42.8

    45.6

    60.1

    66.7 Motorcycle +16%

    99.3

    119.0

    148.2

    172.5

    50.1

    144.3

    37.8

    99.0

    Note: Data collected for countries with PPP per capita < USD 15,000; ASEAN countries

    include Indonesia, Thailand, Malaysia, Philippines, and Vietnam

    Source: EIU, Global Insight, Team Analysis

    Car ownership per 1,000 people

    Malaysia

    Romania

    Russia

    BrazilIran

    Argenna

    Chile

    Kazakhstan

    South Africa

    Indonesia 2017Indonesia 2007

    ASEAN 2007

    MexicoUkraine

    Egypt

    IndiaSri LankaChina

    Thailand

    PhilippinesVietnam

    Indonesia 2012

    Pakistan

    Turkey

    GDP per capita (USD PPP)

    4,0002,000 14,000 16,0006,000 8,000 10,000 12,000

    300

    200

    100

    0

    equipment segment. Transportation equipment industries are concentrated and form a major hub of

    transportation equipment production in Jakarta, Bogor, Bekasi and Karawang/Purwakarta (Greater Jakarta).

    The transportaon equipment industry has a strong potenal to connue growing. Ownership rao of vehicles

    in Indonesia is sll low and is expected to rise with the increase in GDP.

    The increase in car sales is expected to be followed by the transportaon component of industrial producon

    growth as projected in Figure 3.C.14

    Comparison of Transportaon Spare Part Industry Producon Growth

    Source: API, Indotexle, Team Analysis

    0 5 10 15 20

    IndiaIndonesia

    ASEAN

    Thailand

    China

    Russia

    Czech

    Poland

    Mexico

    Brazil

    TurkeyIran

    Italy

    Germany

    USA

    16.1

    11.1

    10.4

    10.4

    10.0

    7.4

    4.9

    4.2

    3.9

    3.8

    3.2

    2.8

    2.1

    1.1

    1.3 Growth (%)

    (CAGR 2007 - 2012)

    Figure 3.C.14: Comparison

    of Transport Components

    Industrial Producon

    Growth

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    Figure 3.C.15:

    Vehicle Producon in

    Indonesia for Export

    and Domesc Sales

    CAGR 2006-2008

    (Thousand Units)

    800

    600

    400

    200

    0

    Producon of vehicles in Indonesia for export

    and domesc sale

    Source: Euromonitor, Data Consult, AISI, Team Analysis

    20072006

    10.5 14.6 16.8

    2008

    31

    296

    265351.4

    499.6 Producon for

    domesc sale37.3%

    Producon for

    exports80.6%101.0

    600.6

    60.3

    411.6

    Exports as % of

    producion

    In addion to large domesc markets, Indonesia is also likely to increase exports of vehicles. Although producon for

    export has not been big in volume, producon for exports is expected to grow two mes faster than domesc sales.

    The main economic acvies for transportaon equipment will face a number of challenges and problems asit

    develops and grows. Consistent availability of electricity is one of the main challenges. Periodic blackouts andhigh costs are obstacles that many producers complain about.

    Seaport infrastructure limitaons could inhibit the growth of this industry. The development and operaon

    of the car terminal in Tanjung Priok is sll perceived as crical, eventhough there will be additonal terminals

    developed and already exist in medium term planning.

    The limitaons of skilled and capable human resources is also considered a crical maer that needs to be

    addressed in order to aract more Original Equipment Manufacturers (OEMs) to invest in Indonesia.

    The problems faced by the transportaon equipment industry can be described as follows:

    ASEAN regulaons and policies have encouraged the development of automove industry and its

    components in ASEAN countries. The implicaon of this conditon is a higher import of CBU vehicles from

    other ASEAN countries (especially from Thailand) compared to CBU vehicle exports from Indonesia to

    other ASEAN countries;

    Lack of incenves for the development of the motor vehicle industry and its components that are based

    on future technology (Fuel Ecient Car);

    The policy for motorcyle (two-wheeled vehicle) industry has not been eecve;

    The increase in volume of low quality and low price vehicle components imported from China,

    Thailandand India;

    Current regulaons/policies are not aracve for the development of automove industry;

    The current regulaons do not support the automove industry to do exports.

    The following strategies need to be implemented to respond to the challenges faced:

    Increase overall capacity in order to ancipate the growth of domesc and export markets in 2015

    through 2025 by giving priority to certain Motor Vehicle Industry Investment and its main component

    within the period of 2011-2014;

    Develop the ability to design and construct vehicles;

    Increase role in development and harmonizaon of industry standards for motor vehicles within the

    internaonal arena;

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    Improve the investment incenve policies;

    Improve the policy of export development;

    Improve the domesc market development policies.

    Regulaon and Policy Regulatory and policy reforms required in order to support the strategiesand eorts to address the problems include:

    Strengthen the structure of the automove industry through the addion of major components industries

    such as engines, drive trains, and axles;

    Revise regulaons on threshold for exhaust emissions and noise, as well as building the industry for

    alternave-fueled vehicles;

    Acvely parcipate in the global arena with harmonizaon of automove industry standards;

    Harmonizaon of taris by the FTA, for upstream and downstream industries;

    Policy incenves, which include the proposed reducon in tax allowances, Import duty and Value Added

    Tax (PPN);

    The policy of export development through the proposed reducon in import duty and Income Tax (PPh);

    Policy for domesc market development through the proposed reducon of import duty, VAT, Vehicle Re-

    registraon Fee (BBN), and Vehicle Registraon Tax (PKB);

    Provision of incenves to OEMs to make Indonesia its producon base. With the AFTA, OEMs have

    greater freedom to determine its producon base, therefore, strengthening relaonships with exisng

    OEMs is crucial. It is necessary to create an condusive climate to aract investment in Indonesia

    compared to other countries in Southeast Asia.

    Connecvity (infrastructure) Development of the main economic acvies requirestransportaon and infrastructure connecvity support in the form of:

    Increased capacity and adequate electricity supply to avoid periodic blackouts, which can also reduce

    the high producon cost;

    The development and operaon of motor vehicles special terminal at the port of Tanjung Priok or in

    the short term, the addion of new terminals.

    Human Resoures and Science & Technology The necessary steps required for thedevelopment of transportaon in regards to human resources and science & technology include:

    Encourage the transfer of knowledge and technology, in which currently, Indonesia s manufacturing

    capability is limited to acvies with low added value (it is necessary to raise Indonesias

    manufacturing posion in the value chain so that it is no longer just producing simple plasc

    component, but have the capacity to produce the body, electrical components and complex

    transmission); Improve ability to provide adequate resources for experts with proper skills to perform higher

    addedvalue tasks, especially to aract investments from Original Equipment Manufacturers (OEMs) to

    Indonesia, specically in Java.

    As a marime country with extensive territorial waters, Indonesia requires sea transportaon to travel within

    its archipelago. Ships are needed, not only as a means of transportaon for passengers and goods, but also to

    support the defense system in Indonesian waters.

    Within the last ve years, the shipping industry in Indonesia has shown good progress. In March 2010, Indonesia

    had a eet of 9,309 units (11.95 million Gross Tonnage), an increase by 3,268 units of ships (54.1 percent)

    compared to that in March 2005 (6,041 ships; 5.67 million Gross Tonnage) (IPERINDO, 2011). This increase is

    the impact of the implementaon of base cabotage, e.g. 100 percent of domesc freight must be transported

    by Indonesian-agged vessels (Presidenal Instrucon No. 5 Year 2005 on the Naonal Shipping Industry

    Empowerment).

    Shipping

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    On a naonal scale, the major challenge facing the shipping industry is to increase the capacity of the naonal

    ship building industry to build ships. This is a result of the implementaon of base cabotage, considered by

    some as too early and not in line with domesc industrial capability to build ships. On an internaonal scale,

    the main challenge is to increase the role of Indonesia in internaonal ship building. Indonesia is one of thelargest marime countries in the world, but the posion of Indonesia in the role of ship building in the world

    is sll far below Vietnam. Currently, Indonesia is ranked 18th while Vietnam is ranked 5th. Top posion is held

    by China, followed by South Korea and Japan (Investor Daily, 2009; IPERINDO, 2011)1.

    Strategies needed to be undertaken to raise the level of Indonesias marime posion:

    Increase ulizaon of domesc producon of ships;

    Increase capacity and capability of the shipping industry;

    Development of shipping supporng industries (shipping component); and

    Improve support of the banking sector to the shipping industry.

    Regulaon and Policy In order to support the major economic acvies of shipping development inJava, as well as Sumatra, the necessary support and related policy regulaons needed are:

    Increase the number of manufacturers and the ability of naonal shipbuilding industry in the construcon

    of ships up to a capacity of 50,000 DWT (Dead Weight Tonnage). Shipyards that have the facilies in the

    form of buildingberth/raving dock capable of building/repairing boat/vessels up to a capacity of 300,000

    DWT are directed to be developed outside of Java or Sumatra;

    Give priority to the building and improvement for ships under 50,000 DWT in the country;

    Review Presidenal Decree No. 22 Year 1998 on Commercial Ships and Fishing Vessel Import in New and

    Non-New Condion, in the context of ulizaon of the naonal shipbuilding industry and its supporng

    industries;

    Give priority to the manufacturing of vessels supporng exploraon and exploitaon of oil and gas that

    can be made domescally, except for the type-C vessels;

    Determine the reasonable level of interest rates and collateral for loans from commercial banks and the

    provision of so loans facilitated by the Government;

    Restructure the strong nancial support from a number of nancial instuons in the country to nance

    the domesc producon of ships in order to comply with the provisions of cabotage;

    Review the policy for Value Added Tax (VAT) from upstream to downstream shipping industry in order to

    cut cost of producon;

    Review the applicaon of policy on import duty covered by the Government (BM DPT) for the shipping

    industry, in which BM DPT applies only for shipping components that are not produced in Indonesia.

    Connecvity (infrastructure) Eorts to develop the shipping industry in Java requires connecvity(infrastructure) support in the form of: Pier development, break water facility, main access point and terminals access point at the seaports used

    for shipping industry acvies;

    Provision of electricity;

    Provision of clean water treatment plant and wastewater treatment facilies.

    Human Resources and Science & Technology Shipping industry acvies should also besupported by the development of human resources and science & technology through:

    Increased capability in ship design through the development of special schools in the eld of shipping

    industry to improve capability to produce sha, propellers, steering gear and deck machinery;

    Educaon development to increase the capacity of industries supplying raw material for ship component; Improved facilies of test laboratories to comply with the Internaonal Marime Organizaon (IMO)

    standards;

    Roune training for work force in the shipping industry.

    Source: IPERINDO, 2011

    10,000

    9,000

    8,000

    7,000

    6,000

    5,000

    4,000

    3,000

    2,000

    1,000

    0

    ShipUnit

    9,309

    6,041

    unl March 31, 2005 unl March 31, 2010

    3,268 unit

    (54.1%)

    Figure 3.C.16: Increasing

    Number of Fleet Naonal

    Commerce Indonesian ag

    (Posion in March 2005 vs.

    March 2010)

    1Investor Daily, 2009, Investasi Galangan Kapal Butuh US$ 5,4 Miliar,hp://www.ptppa.com/index.php?opon=com_content&view=arcle&id=98%3Ainvestasi-galangan-kapal-butuh-us54-miliar&cad=1%3Alatest-news&lang=in, April 6th, 2011IPERINDO, 2011, Potensi S ektor Industri dan Manufaktur Bidang Perkapalan,disampaikan pada Rapat Percepatan dan Perluasan Pembangunan EkonomiIndonesia 2011-2025, Borobudur Hotel, February 8th, 2011

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    As menoned in the Presidenal Regulaon No.28 Year 2008 on Naonal Industrial Policy, ICT has beenrecognized as a mainstay industry of the future. In addion, the ICT is a meta-infrastructure2, which is

    becoming an important prerequisite for maintaining the sustainability of economic growth. Development of

    ICT should connue to be accelerated in order to improve the naons compeveness to create knowledge

    based economy.

    ICT has been able to provide the range and choice of services that increasingly facilitates various levels of

    society to gain access to voice communicaons, images and data. Currently, except for Maluku and

    Papua, all major cies in Java and other main islands have been connected by ber-opc backbone network.

    Meanwhile, the ICT market is growing from year to year. In 2009, markets included hardware products valued

    at USD 979.9 Million, consulng USD 211.7 Million and soware USD 110.3 Million (HP Indonesia, 2009).

    However, to support the acceleraon and expansion of economic development, ICT infrastructure

    development needs to adapt to internaonal trends and available new technologies. The Indonesian

    government has targeted the development of the Naonal Broadband Network (NBN) for the period 2010-

    2015. This is in line with the World Bank study (2009) which states that for developing countries, every 10

    percent increase in broadband penetraon can enhance economic growth by 1.38 percent. As one of the

    major naonal economic acvity, the development of NBN is integrated into the Masterplan for Acceleraon

    and Expansion of Indonesia Economic Development (MP3EI).

    2Metainfrastructure is any infrastructure which can improve theeecveness of other infrastructure

    Informaon and Communicaon Technology (ICT)

    Source: Telkom Indonesia, 2011

    80%

    70%

    60%

    40%

    30%

    20%

    10%

    0

    InstalledBroadband

    Percentage

    Installed Broadband Capacity Percentage

    2010 2011 2012 2013 2014 2015

    up to 1 Mbps 19% 15% 11% 7% 3% 2%

    1-4 Mbps 60% 53% 42% 29% 19% 8%

    20 Mbps 21% 31% 43% 56% 68% 75%

    100 Mbps 0% 1% 4% 7% 11% 15%

    Figure 3.C.17:

    Wireline Access

    Transformaon

    target 2010-2015

    The target to be achieved in the development of ICT infrastructure is to develop NBN based on the

    development of the Telkom Super Highway network and other network operators that currently exists. With

    this, the target of the development of ICT by 2014 is reaching broadband connecon level of 8 percent of allhouseholds or 30 percent of the populaon already convered by broadband access.

    However, the development of NBN to spur economic growth must also be synchronized with the eorts to revitalize

    the domesc ICT industry, considering that during this process, the ICT sector remains largely dependent on imported

    goods. Data from Ministry of Communicaons and Informaon (Kemkominfo) shows that the development of

    ICT infrastructure experienced rapid growth with capital expenditure (CAPEX) of ICT devices around IDR 40 Trillion

    during the period of 2004-2005, and the number is increasing from year to year, especially with the growing needs

    fornaonal broadband capacity.

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    2008 2009 2010 2014

    Populaon (million) 238 240 242 252

    Number of Household (million) 61 62 63 66Number ofBroadband (million) 0.41 0.85 1.25 19.7BB Penetraon (% of Household) 0.2% 0.4% 0.5% 8%

    BB Penetraon (% of populaon) 0.7% 1.4% 2% 30%

    Broadband

    Penetraon

    Target

    ICT INDUSTRY UPSTREAM-DOWNSTREAM (CURRENT CONDITION)

    FOREIGN

    FOREIGN FINISHED

    PRODUCT

    ICT

    COMPONENT

    NON ICT

    COMPONENTASSEMBLY

    ASSEMBLYSW DESIGN

    HOUSE

    FOREIGN

    - Plasc

    - PCB Design

    House

    - Antenna

    - Module

    - Cabin

    - Power

    - Plasc

    - Copper

    - Paper

    - Prinng

    - Base Staon

    - CPE

    - M.I.D.

    - Handset

    - Computers

    - User

    Interface

    - Games

    INDONESIA INDONESIA INDONESIA

    & FOREIGN

    ? 60% 5% 5% 30%BOM

    Weight

    Source: Telkom Indonesia, 2011

    UPSTREAM DOWNSTREAM

    Figure 3.C.20:

    ICT Industries

    Downstream-

    Upstream Linkages

    Figure 3.C.18:

    Naonal ICT Service

    Target

    The ICT industry structure can be described in the form of layers, in which the industry located at the upper layer

    depends on the layer below it (ICT industry Layer Structure) as is shown on gure 3.C19.

    Based on consideraons for strategic posion, the readiness of stakeholders in the country, values, and schedule

    of implementaon, it is expected that the Government of Indonesia will fully support domesc industries,

    namely:

    1. Device Manufacturing Industry;manufacturing of terminal devices in all Economic Zones and chipset

    industries centered in Economic Zones located in Java.

    2. Ecosystem Development-based Services Industry;i.e. professional and consulng services, market research.

    3. Content and Applicaons Industry;which support soware applicaons in producve sectors such as

    agro-industry, tourism, sheries, mining, and creave industries (adversing, animaon, games, cloud

    applicaon).

    4. Ecosystems Research and Innovaon to support industrial development and synchronized with the

    priories and needs of users in each economic zone.

    In the case of ICT device manufacturing industry, there are linkages between upstream-downstream industries.The upstream industry represents research and development (R & D) and the downstream industry is

    the nished product in the form of devices. Devices are not only limited to small/hand-held devices, base

    staons, computers, and electronic tools, but also supporng devices for telecommunicaons operator

    (telecommunicaons infrastructure).

    The main challenge faced by the ICT industry is preparing to face free market compeon beginning 2014.

    In 2014, aside from Indonesia, which targets a 30 percent broadband penetraon, other countries are also

    targeng large increase in broadband penetraon i.e. Korea 93 percent, Singapore 87 percent, Malaysia 73

    percent and Taiwan 57 percent.

    Figure 3.C.19 Structure

    of ICT Industry Layer

    Layer 0 Content Industry

    ICT Applicaon Industry

    (e-Government, e-Health)

    Access Sevices Industry

    Infrastructure Services Industry

    (network provider)

    Integraon, Installaon, and MaintenanceSystem Industry of ICT Device

    ICT Device Manufacturing Industry

    ICT Device Component Industry

    ICT Device Component MaterialIndustry

    Layer 1

    Layer 2

    Layer 3

    Layer 4

    Layer 5

    Layer 6

    Layer 7

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    Strategies needed to respond to the above challenges include:

    Harmonizaon of policies and government programs to create a conducive atmosphere to encourage the

    development of ICT in Indonesia;

    Acceleraon of equitable provision of infrastructure and ICT services; Expanding the use of ICT applicaons in various major economic acvity;

    Strengthening the compeveness of the naonal ICT industry.

    Regulaon and Policy In order to support the general strategy, regulatory and policy measures needto be aligned, namely:

    Evaluate TKDN (Level of Local Content) calculaon and guidance for Domesc Industries including for SMEs;

    Provide tax incenves for ICT components that can not be produced in Indonesia;

    Prepare mechanism of cooperaon among government agencies, private, and research instutes.

    Connecvity (infrastructure) The development of ICT industry needs to be supported by: Provision of backbone and last mile connecon with required broadband capacity to support business

    enes;

    Development of government communicaon and informaon systems that are safe (secure) and

    integrated.

    Human Resources and Science & Technology Development of ICT industry needs to besupported by the following acvies:

    Build data centers and data recovery center based on in-country potenals and human resources;

    Encourage capacity building in the ICT sector in every layer of society, both in the civil society,

    government agencies and decision maker(s);

    Build domesc applicaons and digital content industries;

    Expand the scope of laboratory tesng capabilies so that it can test the technical specicaons of other

    countries;

    Build and develop the Smart and Techno parks.

    It is very important for Indonesia to have the ability to maintain security and to create conducive atmosphere

    for economic development. The task of maintaining naonal security will be easier if there is guaranteed

    technological capability support from the naonal strategic industry. The naonal technological capability

    should be able to produce defense equipment products as well as commercial products that are highly

    compeve.

    In the defense equipment industries, there are a number of naonal programs where the state-owned

    enterprises is the lead integrator (person in charge of the system) and SOE Strategic Industries as the level 1,

    level 2 and level 3 (er 1 to er 3) Contractors. Naonal programs should be able to produce planes, rockets/

    missiles, torpedoes, warships/submarines, combat vehicles, weapons, and ammunions.

    There are compelling reasons for Indonesia to further develop this area:

    Indonesia has a higher border threat as a result of its vast sea and land border. Border cases in Indonesia

    are oen triggered by strained relaons with neighboring countries. The forms of violaons that occur

    are complex, including illegal shing, illegal mining and trading in the form of sand mining and logging;

    The forms of the oense require a systemac eort to save Indonesias oceans, as well as improve the

    ability to exploit marine resources of Indonesia;

    The strategic posion of Indonesia on the axis of internaonal trac, including its placement making it

    more prone to various security threats by air. Air safety issues with potenal future threats include threats

    of violence (air piracy, sabotage vital facilies, terror, and so on), the threat of air violaons (dark and

    reconnaissance ights to parts of Indonesia), the threat of resources (use of airspace by a foreign country),

    and the threat of violaon of the law through the medium of air (illegal migraon and human smuggling).

    Defense Equipment

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    2009-2010

    2011

    2011-2015

    2015-2020

    2025

    Determinaon of TNIs Needs

    Industrial Policy

    Naonal Defence

    Determinaon of The

    Enterprises

    Formulate Naonal Program

    Determinaon of Enterprise

    Mission

    Budgeng Policy

    Expansion to global market

    through partnership

    MISSION

    1. Fullling the basic needs of military dimension

    of land, sea, and air, so that Indonesia could

    become independent

    2. Experng technology and having domesc

    industrial root

    3. Having competent and creave human

    resources

    4. Having wide network through strategic

    alliances with domesc and overseas partner

    Independent DefenceIndustry

    Compeveness Development

    Investment

    Progressive Manufacturing Prototyping

    Long Run

    Core CompetenceDevelopment

    Strategic Alliances

    Short Run:

    Determinaon of Mission

    Improving Enterprises Quality

    Human Resources Preparaon

    System Reorganizaon

    Increasing Revenue Mix

    Middle Term:

    Business Reposioning &

    Markeng System

    F inancial Access Domesc and Foreign Partnership

    Innovaon and Development of

    Product & Services

    Figure 3.C.21:

    Strategic Defense

    Industries unl 2025

    Regulaon and Policy In order to support the general strategy, the following maers must beaddressed:

    Urgent discussion of the bill related to the Strategic Industries Development and Ulizaon for Defense;

    Acceleraon of the publicaon of the Presidenal Instrucon that can be used by the Ministry of Defence

    and Security, Ministry of Industry, Naonal Development Planning Agency, and Ministry of Finance in

    carrying out the construcon of propellant;

    Increased cooperaon with foreign partners, as well as increased involvement of Indonesian humanresources in the development of KFx ghter aircra design.

    Human Resources and Science & Technology Support for the development of major defenseequipment requires the construcon of research centers in order to increase technological capabilies and

    producon.

    On the other hand, the main economic acvies for defense equipment is to address problems in order

    to develop and grow. This is due to the absence of Law for Development and Ulizaon of Strategic Defense

    Industries that would support Indonesia to have a naonal defense industry. The domesc industry has not

    been able to provide for all of their own needs.

    Development of acvies for defense equipment to 2025 emphasizes the fulllment of the increasing needs of

    defense equipments from TNI (Naonal Army) and Naonal Police. This can be accomplished by beginning with

    the following strategies: synchronizaon to meet the needs of defense equipment within the domesc industry,

    accelerate technology transfer process (transfer of technology) for infrastructure development, increase local

    content and producon cooperaon (joint producon), and encourage further economic acvity in the country.

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    Aerospace Industry

    In addion to products related to defense and security, other products that are highly commercial/compeve

    that could be an output from the naonal strategic industry is the producon of air passenger transportaon.

    In the vast archipelago of Indonesia, geographical condions oen dictate the mode of transport. If the locaon

    is dicult to reach using land or sea transport, then air transport is a beer alternave, only if there is sucient

    airport infrastructure.

    Air transport is a preferred mode in order to facilitate the ow of people, goods and informaon from an area or

    region to another. Air transport is considered a transportaon mode related to me ulity as a means of moving

    people, goods and informaon within or across regions.

    The implementaon of air transports to remote areas, which oen is economically not protable, needs

    government compensaon in some form of subsidies to ensure connuity of air transport services to remote

    areas.

    Main challenges faced by the Naonal Aerospace Industry are as follows:

    The market for the product class Feeder (19 passengers) and Commuter Regional (30 to 50 passengers)

    are very large. Almost all the world airline industry compete market in Indonesian market; Aircra products owned in Indonesia, are products of the 1970s and 1980s, and there has been no

    substute product unl now;

    Low local commitment to use domesc products;

    Not having Customer Financing and Leasing Facilies like other aircra industry;

    Growth in passenger movement and goods transport connue to rise, though the rate of an aircra

    accident rate in Indonesia is sll high;

    The average age of an aircra in Indonesia is over 20 years.

    NATIONALSYNERGY

    Aircra with 50 seatsCapacity (Naonal Producon)

    Amphibi Aircra

    Rapid passengers growth

    Lack of aircra with 50seats capacity

    Exisng Condion NATIONAL STRATEGICINDUSTRY

    Figure 3.C.22:

    Synergy Aerospace

    Industry Development

    Planning and ImplementaonCoordinaon

    Sercaon andUsers

    Assistance andIndustry Policy

    Supervisor of SOE

    Technology

    Development

    Ministry of Research

    and TechnologyGovernment

    Agencies and R&D

    Ministry ofTransportaon

    Ministry ofIndustry

    Ministry of SOE

    Ministry of Research andTechnology

    The Agency for the Assesment and

    Applicaon of Technology

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    Figure 3.C.23:

    Comparison between

    Esmated Number of

    Vehicles and Highway

    Capacity

    15,000

    10,000

    5,000

    0

    10,000

    8,000

    6,000

    4,000

    2,000

    0EsmaonofTotalVehicle

    inJabodetabek

    RoadsLength(Km)

    Esmaon of Total Vehicle Number

    Roads LengthRoad Capacity

    2008 2009 2010 2011 2012 2013 2014 2015

    Regulaon and Policy To address the various challenges in the development of the naonal aerospaceindustry, regulatory and policy support is required for the following:

    Develop standardized aviaon components by using maximum local content and technology transfer;

    Develop raw materials industrial and components to support the aerospace industry; Develop and produce primarily passenger aircra with a capacity of less than 100 passengers;

    Provide ease of nancing facilies and taxaon;

    Facilitate cooperaon with similar industry and/or market users at home and abroad;

    Provide support from the state budget nancing, budget and procurement of domesc banks in the

    producon of naonal aircras;

    Mul-years contracts, can be used by remote areas aviaon operators to purchase the aircra with a

    capacity of 19 passengers;

    Establish an integrated regional airline industry.

    Human Resources and Science & Technology Eorts to support the naonal aerospaceindustry requires human resources and science & technology and development through:

    Development of markeng research and engineering that are commercially feasible;

    Human Resources Development in aerospace industry.

    The Jabodetabek Area covers three provinces (namely DKI Jakarta, Banten and West Java) and 12 regencies/

    cies which control approximately 60 percent of naonal import-export acvies, as well as more than 85

    percent of decisions related to the naons nancial.

    Based on the latest populaon data, the total populaon residing in the Greater Jakarta area is approximately

    28 million inhabitants (2010) or more than 12 percent of the naonal populaon. Greater Jakarta area is the

    largest urban area in Southeast Asia. It is esmated that more than 30 percent of Greater Jakarta residence

    has income of more than IDR 50 Million or approximately USD 5,000 per year.

    There are a number of challenges faced in the development of Greater Jakarta. One of the main problems

    in this region is high trac congeson caused by the current road capacity, which if far below the capacity

    required to accommodate vehicle movement. Growth of motor vehicles is much higher than the growth of

    road capacity.

    Greater Jakarta Area/Jabodetabek Area

    Another challenge faced by the Greater Jakarta area is the low availability of clean water, limited airports and

    seaports capacity, and hindered access to airports because of ooding during the rainy season. The occurrence of

    ooding is caused by poor drainage arrangements, and the buildup of waste in rivers such as Ciliwung River, and Kali

    Krukut.

    Source: Team Analysis, 2010

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    40

    30

    20

    10

    0

    Soekarno-Haa Airport Capacity(Current condion)

    Source: Team Analysis, Jakarta Globe Source: Indonesia Shipping Report 2010

    Passengers

    Capacity

    +15%

    2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

    Terminal 3Operaon

    20

    15

    10

    5

    0

    Passengers (Million) Mn TEUs

    Capacity and Esmated of ContainerSea Port Demand in Jakarta

    Passengers

    Capacity

    2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

    Inadequate CapacityAer 2014

    Figure 3.C.24: The Capacity of

    Airports that are no Longer

    Sucient

    Figure 3.C.25: Capacity and

    Demand Esmates in Jakarta

    Container Port

    Strategies undertaken to address these challenges include:

    Spread business acvity outside of DKI Jakarta to reduce the me of travel between business centers inthe internal Greater Jakarta;

    Development of a mass transportaon system that is comfortable, safe and cheap, especially to

    commute from the suburb area (expected to reduce air polluon of this region more than 50 percent)

    and because about 40 percent of the naonal vehicle located in Greater Jakarta, it will signicantly

    reduce the amount of naonal subsidies for fuel. Subsidy reducon could be used by other regions in

    Indonesia that is more in need;

    Development of interconnected mass transportaon network paern that is easily accessible to all the

    acvies surrounding the business centers and government;

    Development of an ecient logiscs network of producon centers in the region as well as with other

    producon centers that have a close relaonship;

    Development of sewerage and drainage system that can overcome the problems of environmentalquality (accumulaon of garbage, slums and ood).

    Regulaon and Policy In order to support this general strategy, some related regulatory andpolicy measures need to be done, namely:

    Arrange transportation management into a single institutional handling at the central government

    level;

    Build the Maja area in Tangerang and provide incenves to encourage spread of some acvity outside

    of DKI Jakarta;

    Encourage cooperaon with various pares, both with domesc and internaonal community, through

    mechanisms that uphold professionalism;

    Organize neighborhoods and business centers to encourage a beer micro-cosmic condion through

    the provision of green areas;

    Expand the industrial area to the east of Jakarta, including developing smart community.

    Connecvity (infrastructure) Advancing the Greater Jakarta area can be done by: Further developing Soekarno Haa Airport;

    Further developing the Port of Tanjung Priok and build a new possible Port at Cilamaya;

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    Figure 3.C.26: The Value of

    Investments in Java Corridor

    Develop a network of mass transportaon trains from suburbs into the center of metropolitan areas and

    metropolitan centers in the region;

    Build the MRT North-South, East-West to reduce air polluon and the amount of naonal subsidies for

    fuel; Build a monorail and a circular railway line from Manggarai to Soekarno-Haa Internaonal Airport;

    Improve road network in the Greater Jakarta area, including the construcon of y-overs and under-

    passes;

    Develop a logiscs network of industrial centers on the outskirts of Greater Jakarta area for improved

    access to the Port of Tanjung Priok Port Cilamaya, and Soekarno-Haa Airport;

    Reform the ood control system;

    Reform the system of solid and liquid waste disposal from residenal areas and industrial areas, including

    the development of processing and nal disposal of solid waste in West Java;

    Develop new sources of clean water supply.

    Other economic acviesIn addion to the main economic acvies for Java, there are also several industries that are considered

    to have potenal for development, including steel, copper, oil and gas as well as the 10 Naonal Tourism

    Desnaons. These acvies are expected to contribute to the enre development of Java Corridor.

    InvestmentThe Java Economic Development Corridor idened new investment plans for development of main economic

    acvies of Food and Beverage, Texles, Transportaon Equipment, Greater Jakarta Area, Shipping, Defense

    Equipment, and supporng infrastructure with a total investment of IDR 1,278 Trillion

    The following is an overview of exisng investment in Java:

    1,500

    1,000

    500

    0Food andBeverage

    Indicaon of Investment in Java Corridor

    IDR Tn

    JabodetabekArea

    TransportaonEquipment

    Shipping Texle InfrastructuresICT Total

    Mix

    SOE

    Private

    Government

    Defense

    Equipment

    352

    844

    419

    283

    95

    481

    1,278

    25 32 9 29 4

    Investment iniaves that successfully idened the funds are collected from Government, private sector and

    state-owned enterprises as well as a combinaon of all.

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    In addion to the investments listed, there are some other investments that are part of the 22 naonal

    priories but are not part of main economic acvies in Java, such as Steel, Copper, Tourism (focused on 10 of

    the Naonal Tourism Desnaon) and Oil & Gas with a total investment of IDR 168.58 Trillion.

    Strategic Iniaves of Java Corridor

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    Figure 3.C.27: Java Economic Corridor Investment Map

    Java Economic Corridor

    Government

    SOE

    Private

    2K2-(16)-2

    IDR 351.89 Tn

    Jabodetabek Area

    IDR 7.58 Tn

    Banten: Food and

    Beverage, Transportaon

    Equipment

    K2-(2,4)-1 1

    IDR 1.27 Tn

    Bogor:Transportaon

    Equipment

    K2-(4)-3 3

    IDR 28.65 Tn

    Bekasi & Surroundings:

    Transportaon Equipment,

    Food and Beverage

    K2-(4,2)-4 4

    IDR 4.37 Tn

    Southern Central Java:

    Food and Beverage,

    Texles

    K2-(2,3)-6 6

    IDR 2.06 Tn

    Pasuruan-Malang:

    Food and Beverage

    K2-(2)-8 8

    IDR 51.64 Tn

    Java:Trans Java Toll Road

    K2-(23)-9 9

    IDR 204.54 Tn

    Java:Railway and

    Express Train

    K2-(23)-10 10

    IDR 13.44 Tn

    Metropolitan Gerbang

    Kertosusilo: Food &

    Beverage, Shipping

    K2-(3,5)-7 7

    IDR 1.97 Tn

    Bandung & Surroundings:

    Defense Equipment,

    Texles

    K2-(18,3)-5 5

    1 2

    3

    4

    5

    10

    10

    109 9

    9

    6

    8

    7

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    No Code LocusMain Economic

    AcvityStakeholders Supporng Infrastructure

    InvestmentValue

    (IDR Trillion)

    Investment SharingTowards Main EconomicAcvies in All Corridors

    (%)

    1 K2-(2,4)-1 Banten

    Food and Beverage

    Private

    Roads, Power & Energy, Airports, Ports,Railway, Other Infrastructure

    5.12 20

    TransportaonEquipment

    Roads, Power & Energy, Airports, Ports,Railway, Other Structure

    2.46 8

    2 K2-(16)-2 Jabodetabek Jabodetabek AreaGovernment, SOE

    and Private

    Airports, Railway, Ports, Roads, OtherInfrastructure

    351.89 100

    3 K2-(4)-3 BogorTransportaon

    EquipmentPrivate

    Roads, Power & Energy, Other

    Infrastructure1.27 4

    4 K2-(4,2)-4Bekasi and its

    surroundings

    TransportaonEquipment

    Private

    Roads, Ports, Railway, Power & Energy,Other Infrastructure

    22.57 69

    Food and BeverageRoads, Ports, Railway, Power & Energy,

    Other Infrastructure6.08 24

    5 K2-(18,3)-5Bandung and its

    surroundings

    Defense Equipment

    SOE and Private

    Airports, Ports, Power & Energy, OtherInfrastructure

    1.58 100

    TexleRailway, Roads, Power & Energy, Other

    Infrastructure0.38 4

    6 K2-(2,3)-6 Southern CentralJava

    Food and Beverage

    Private

    Roads, Ports, Power & Energy, Railway,

    Other Infrastructure

    3.46 14

    TexleRoads, Ports, Power & Energy, Other

    Infrastructure0.91 10

    7 K2-(3,5)-7Metropolitan

    Gerbang Kertosusila

    Food and Beverage

    SOEand Private

    Roads, Ports, Railway, Power & Energy 4.44 17

    Shipping Roads, Power & Energy 9.00 56

    8 K2-(2)-8 Pasuruan-Malang Food and Beverage PrivateRoads, Railway, Power & Energy, Other

    Infrastructure2.06 8

    9 K2-(23)-9 Trans Java Toll Road Cross Sector

    Government,

    Private - 51.64 3

    10 K2-(23)-10Railway and Express

    TrainCross Sector

    Government, SOE

    and Private- 204.54 11

    Figure 3.C.28:

    Investment Indicaon

    Agglomeraon

    Masterplan P3EI

    Java Economic Corridor94

  • 8/3/2019 MP3EI Jawa

    23/23

    Figure 3.C.29: Indicaons of

    infrastructure investment by

    government, SOE and Mix

    In addion to investments associated with the main economic acvies above, the Government and SOEs

    are commied to infrastructure development in Java Corridor. The following is an indicaon of infrastructure

    investment which will be implemented during 2011 - 2014 for each type of infrastructure that will be made by

    the Government, SOEs, and mix:

    Looking forward, even though Java will connue to serve as a pillar for the Indonesian economy, economic

    development for main economic acvies should be limited if they consume large quanes of water and

    have high energy consumpon. Java should restrict economic acvity that is aggressively changing the

    environmental landscape. In the period from 2011 to 2014, Java Economic Development Corridor will focus

    on six main economic acvies with an indicaon of the total investment to be issued expected to reach IDR

    1,278 Trillion.

    In relaon to spaal structure, and by promong the principles of sustainable development, infrastructure

    development in Java Economic Corridor will be focused on the northern part of Java. Along the northern coastof Java, the Trans Java highway and railroad will be constructed that will connect dierent locuses.

    The development and improvement of seaports in Tanjung Priok, Cilamaya, Merak, and Lamongan will

    expedite the ow of goods both intra-and inter-corridor. Internaonal Airport of West Java which will be built

    in Majalengka, and is expected to accelerate the realizaon of the Corridor and at the same me spread the

    density of economic acvies in western part of Java.

    The development of a number of main economic acvies and the development of connecvity in Java

    Economic Development Corridor is expected to help Java overcome the main problems faced by the corridors

    of GDP disparies among regions. Acceleraon and expansion of the economy in Java Corridor is expected

    to strengthen the posion of Java as the Center of Naonal Industry and Services Provision and provide

    posive eects for the development of other corridors.

    Indicaon of infrastructure investment by Government, SOE, and Mix (IDR Tn)

    800

    600

    400

    200

    0

    237

    32

    16

    105

    45

    24

    138 787

    TotalOther

    Infrastructure

    Water

    Ulity

    ICTAirport RailwayPower & EnergyPort

    189

    Road

    Masterplan P3EI

    Java Economic Corridor95