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INDONESIA TRANSPORTATION SECTOR OVERVIEW Infrastructure Forum December 2012 Den Haag Bambang Susantono, Ph.D Vice Minister for Ministry of Transportation Republic of Indonesia Snapshots of the country Indonesia Today and in 2030 16th largest economy in the world 9th largest economy in the world 45 million members of the 135 million members of the 53% population in cities producing 74% of GDP 71% population in cities producing 86% of GDP 55 million skilled workers 113 million skilled workers needed $ 0.5 trillion market $ 1.8 trillion market opportunity consuming class opportunity in consumer services, agriculture and fisheries, resources and education consuming class in consumer services, agriculture and fisheries, resources and education Source: McKinsey Global Institute 33 GDP and urbanization pattern in the future 86 % GDP comes from Urban Areas and 63% from midsize cities Indonesia GDP growth 2010 - 2030 More than just population size The World Embrace Indonesia Performance Indonesia to be the 4th largest economy in 2050 World’s 10 largest economies, 2010 (USD Tn, PPP) World’s 10 largest economies, 2050 (USD Tn, PPP) 2012 – World’s 15th (USD 1,12 Tn, PPP) Breakthrough of MP3EI Master Plan Acceleration and Expansion of Indonesia Economic Development (MP3EI) is intended to accelerate and foster economic development across the nation through (six) economic development corridors This master plan implements the spirit of “not business as usual” Source: MP3EI, 2011 MP3EI Vision THE ECONOMIC MASTERPLAN MAIN STRATEGY ECONOMIC CORRIDORS DEVELOPMENT STRENGTHENING THE NATIONAL CONNECTIVITY STRENGTHENING HR CAPABILITY AND SCI - TECH 10 Pendulum Nusantara: Reducing domestic transportation cost by building national container backbone "Pendulum Nusantara", proposed plan to boost national domestic trade Malahayati Belawan Batam Pontianak P Baru Padang Jambi Bitung Balikpapan Samarinda Sorong P Bai Banjarmasin Palembang Panjang Jayapura Ambon T Priok Biak Makasar Semarang Banten Cirebon Timika Surabaya Benoa Kupang Merauke These don't mean exclusive port development in these locations Source: IPC, 2012 44 Indonesia Main Sea Corridor, West – East Pendulum Loop Aceh BELAWAN Loop Pantai Timur Sumatera BATAM Loop Babel and West Kalimantan TJ PROK Loop NorthEast Sulawesi and North Maluku Loop East Kalimantan Loop Pantai Barat Sumatera SURABAYA Loop West Nusatenggara Loop North Papua SORONG Loop Maluku and SouthWest Papua Loop West Sulawesi MAKASAR Loop East Nusatenggara Main Sea-Corridor 45 The Integrated Pendulum Service would reduce the average shipping costs Prior to the Pendulum Service With the Pendulum Service Source: IPC, 2012 46 Future containership designs The trend toward bigger and bigger container ships is continuing… 20.000 “Triple E” Class (18000 TEU) 18.000 16.000 14.000 E “Emma” Class (12500 TEU) 12.000 10.000 S “Sovereign” Class (8000 TEU) 8.000 R “Regina” Class (6000 TEU) 6.000 L “Lica” Class (3400 TEU) 4.000 Inbound International Container Ships Entering Indonesia (5000 TEU) Indonesia Domestic Container Ship (1800 TEU) 2.000 1970 1975 1980 1985 1990 1995 2000 2005 In 40 years, the capacity of container ships grew six fold Source: Rodrigue, J-P (2011) 2010 47 Port Infrastructure Development along Pendulum Nusantara Hard Infrastructure MINIMUM REQUIREMENT PORT LOCATION BELAWAN BATAM JAKARTA SURABAYA MAKASSAR SORONG Chanel (mLws) -13 - 10,5 -15 -13 -7,5 - 13 N/A Berth (Length/ Depth) 300 / -13 400 / -10 350 / - 400 / -13 450 / - 7,5 850 / -11 N/A Yard (Hectare) 10 5,6 11,5 N/A Equipment (Container Crane Post Panamax) 4 - 4 N/A Belawan Source: IPC, 2012 Batam Sorong 48 Concluding Remarks  Indonesia is an enormous, growing market With its productive workforce, growing middle class, it has the capital to grow to be one of the largest economies in the world  There are abundant business opportunities in growing markets as demand increases, driving more consumption, and thus requiring new or improved infrastructure to support it 49 Thank You 50 Indonesia: Country Profile Land area  Indonesia has total land of 1.8 million sq km and water of 0.9 million sq km  The archipelago state is consist of 17,508 islands, among which 6,000 are inhabited  Total land boundary is 2.8 thousand km and total coastline is 54.7 thousand km Population  Indonesia’s population is estimated as 245.6 billion in 2011  It is the 4th largest country in terms of population, after China, India and United States 51 Overview of Indonesia’s Economic Development In the past decade, Indonesia’s economy has constantly outpaced the average world economy, even in the crisis years of 2008-2009 Figure 1.2: Historical Indonesian GDP development 2003-2010 3.000.000 GDP Growth % 2.500.000 5.4 2.000.000 1.500.000 1.000.000 500.000 - 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Figure 1.2: Historical Indonesian GDP development 2003-2010 7,00 World GDP Growth 6,00 Indonesian GDP Growth 5,00 4,00 3,00 2,00 1,00 2001 Source: IMF 2003 2005 2007 2009 2011 2012 Strong Indonesia GDP growth  Indonesian economy maintained an average 5.4% annual growth during the period of 2001 to 2012 During this period Indonesian GDP growth has constantly outpaced average World GDP growth  In the 2009 downturn, the world economy saw negative growth, CAGR (%) where as Indonesian GDP growth still remained at 4.5%, and 2010, 5.4 Indonesian GDP growth rate has bounced back to 6%  The GDP growth was driven 3.4 primarily by the combination of large volume of foreign investment and the private consumption thanks to the countries vast 52 population Summary of Development Themes of Indonesia Economic Development Corridors “Production, Agriculture, and National Energy Center” “Production, Mining, and National Energy Center” '‘Production, Agriculture, Plantation and Fishery Center” '‘National Agricultuire, Fishery, Energy, and Mining Center “National Industry and Services Enhancer” Source: MP3EI, 2011 '‘Gateway to National Tourism and National Food Annex'' 53 Intra-island, Inter-island, and International Connectivities Locally Integrated, Globally Connected City Town Island Town Asia City Indonesia International Gateway Town Town City Island Town Europe City Town Town Island America City Town Between Growth Centers (sub-regions) Within Growth Centers (urban) Intra-island LOCAL Connectivity Inter-island NATIONAL Connectivity International GLOBAL Connectivity 54 Passenger Traffic Forecast at Jakarta Airport Million pax 160 FORECAST Int'l 140 141.4 Dom Total 120 108.8 Actual 2011 110.3 100 83.7 84.8 80 60 Monetary Crisis Krisis Moneter Deregulation 60.7 65.3 51.5 40 19.7 24.6 26.5 30.5 40.1 20.7 24.5 10.7 11.2 19 8.8 8.2 14.9 9.1 8.6 5.3 5.1 4.6 6.7 3.8 6.1 4.4 11.3 5.8 5.6 4.9 4.8 4.5 3.7 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2011 20 13.9 64.4 14 47.4 50.2 13.4 14.2 2014 2015 18.4 2020 23.9 2025 31.1 2030 Source: AP II, 2012 • Jakarta Airport registered phenomenal growth rates for 2011 in excess of 15% as compared to 2010 (44.4 million pax in 2010 to 51.5 million pax in 2011) 55 Sei Mangkei Railway Development • • • Sei Mangkei Industrial Area is a CPO-based industrial area occupying a land of 2,003 There is a palm kernel oil processing plant with a capacity of 400 tons per day To enhance its logistics, a 25-km railway plan connecting the industrial area to Kuala Tanjung Port is currently being developed 56 Opportunities in Urban Transport Development MEBIDANGRO Population : 3.9 million Area : 2,750 km2 JABODETABEK Population : 21 million Area : 6,580 km2 MAMMINASATA Population : 2.4 million Area : 2,462 km2 BANDUNG RAYA Population : 9.8 million Area : 1,124 km2 GERBANG KERTASUSILA Population : 6.7 million Area : 2,154 km2 SARBAGITA Population : 1.4 million Area : 724 km2 Source: CMEA, 2011 Most of the urban areas are located in the western part of Indonesia There are major cities that in total have 20 percent nationwide population occupying 8.6 percent of the country’s land 57 Urban Railway Development Initiatives Medan Belawan Port Kualanamu Airport Jabodetabek Bandung Surabaya 30km Source: MoT, 2011 58