THE URGENCY OF MARITIME CONNECTIVITY POLICY IN INDONESIA
2. MATERIAL AND METHODS 1 The maritime connectivity policy
3.3. Policy Support
Non-economic factors determine the success of economic policies. A policy more on the issue of whether there is adequate support at the level of choice and implementation of policy. The development problem starts with a big strategy for choosing policies, including financing strategies and political issues that are very closely related to power and money. Therefore, choosing a development strategy in Indonesia must always be assessed from the flow of power and economic interests. Many other practical issues faced by the private sector have driven the high total logistics costs in Indonesia.
To make Indonesia more competitive, it is necessary to strengthen the enabling environment which can reduce trade logistics costs and increase investment competitiveness. Supporting factors needed to strengthen investment attractiveness through maritime connectivity are influenced by the
existence of seaports, shipping services, and intermodal services from sea to land.
The maritime connectivity policy initiated by Indonesia can now be synergized with the idea of 21st century Chinese silk lines. One of these ideas is maritime connectivity from Africa to the Indies, to India, Bangladesh, Myanmar continues to enter the Straits of Malacca or through the south that enters the Lombok Strait, Sunda Strait, continues north into the South China Sea.36 Viewed from the Chinese idea , it looks like China will strengthen its shipping fleet because it also leads to Indonesian territory. If not prepared properly, the maritime connectivity proposed by the government will not obtain optimal benefits.
Therefore, the success of maritime connectivity should be supported by a number of policy support. Policy support must be made to support maritime connectivity in the form of: 1.
Policy Planning The Government has explained maritime development in the National Medium-Term Long-Term Development Plan, with one of the goals being done is to build a network of facilities and infrastructure as an adhesive for all islands in Indonesia.
Problems that emerging from the current conditions are: 1) inadequate development of transportation facilities and infrastructure to and from small islands; 2) distribution of goods from large islands to small islands / vice versa is often not balanced, where from small islands to large islands are often empty; and 3) inadequate port facilities and infrastructure, especially in the eastern region. To overcome these problems, a number of improvements are needed in policy planning so that the gap between large islands and small islands can be minimized. In a practical setting, it is very important for Indonesia to overcome gaps in the maritime belt, which are largely a consequence of economies of scale (eg load factors). Most of the maritime belts in the western part of Indonesia have
ICMST 2019 August, 1 2019 been commercialized because of the high economic
activity in the area, and thus can be easily integrated into regional or even global maritime connectivity.
Most maritime belts in eastern Indonesia are still pioneered due to a lack of economic activities in the area, and thus cannot be easily integrated with regional maritime connectivity.
The main problem of the development of the Eastern Region of ASEAN and the eastern region of Indonesia, is the economies of scale. The market is too small to sustain long-term economic activities.
The development of power plants is always hampered by very limited domestic demand, because most household users are scattered.
Compared to other commodities, electricity has certain characteristics which are produced and consumed at the same time.38 In order for the development of maritime connectivity policies to achieve the expected goals, it is necessary to make periodic / policy stages, which are divided into short- term, mid-term and term policies long. This is needed so that the planning is arranged to be directed and in accordance with the needs and budgeting that is owned.
The periodization / stages of developing maritime connectivity in Indonesia are compiled based on APBN / APBD owned by the government / regional government. So that the development of new maritime infrastructure can be felt in the medium term. In the short term, what can be done is simplifying bureaucracy, such as licensing administration and loading and unloading time, so that it is more directed at structuring the bureaucracy. In the short term, planning has also begun to accelerate the implementation of maritime connectivity policies, such as reviewing the time of port development, improving the quality of human resources, and planning to increase energy availability. Improving the quality of human resources is carried out through a number of trainings, policy socialization, and education.
The territory of Indonesia in the form of islands will make many potential places to become locations for developing maritime connectivity, as a door to exports in the territory of Indonesia. For the western part of Indonesia, development can be focused on Batam and Belawan as export ports, while eastern Indonesia, development can be carried out in Bitung.
The Indonesian Employers' Association in its report published in 2014 stated that the provision of adequate infrastructure capacity including in the form of seaports, air, and roads as well as efficient electricity and telecommunications networks is absolutely necessary to keep pace with economic development, without which economic growth will slow down. With limited government funds, the Public-Private Partnership (PPP) scheme must be addressed with legal and regulatory certainty and appropriate economic incentives to attract private investment in funding priority projects. Accountability of the government and local government is very much needed in ensuring the ongoing infrastructure projects, for example in terms of ease of land access and certainty of business licensing for electricity, railroad, port, and other projects.
The maritime connectivity policy should also be supported by the existence of reliable pioneer services in order to meet the needs of the community. The central government and regional governments must have a high commitment to the certainty of pioneer service routes for a certain period of time and if associated with the concept of sea tolls, the pioneering sea transport homebase must be connected regularly with the port that is visited by the main corridor. So the concept of connectivity and accessibility can be fulfilled by pioneer ships as their expected role in the concept of sea toll.40 Infrastructure development policies are contained in the Master Plan for the Acceleration and Expansion of Indonesian Economic Development (MP3EI), which divides Indonesia's
territory into nine main economic activities.
Substantively, the MP3EI concept with maritime connectivity is in line and can complement each other. On that basis, the policies in MP3EI can still be used and can be continued. The MP3EI concept is indeed not thick with the maritime axis concept, but in it there are priority activities based on the potential of the region. In order to support the effectiveness of this potential, it is necessary to develop transportation that is in accordance with the characteristics of the region in Indonesia, namely the archipelago, and as a liaison it takes transportation in the form of ships.
Based on Law Number 23 Year 2014 regarding Regional Government, local governments can also finance infrastructure in the region through the issuance of regional bonds. So that in order to fix infrastructure in the region, the funds used are no longer limited to balancing funds, but also third party funds whose allocations are regulated in the APBD as a component of regional income. Increased Maritime HR Capacity Maritime human resources are an important aspect in realizing Indonesia as an independent, developed and strong island nation.
Some strategies that need to be carried out to improve the ability of qualified and competitive human resources in the maritime field are to form long-term national policies in the field of technology, and to encourage and support sustainable technology education and training programs including budgetary support, adding higher education institutions and schools vocational middle school in the maritime field, and add researchers who focus on the maritime sector. The number of state vocational schools (SMK) associated with maritime affairs is currently 145 and private as many as 170, with the number of students reaching around 40 to 60 thousand students. The vastness of the sea owned by Indonesia, the potential that has not been well explored, and the many communities living around coastal areas makes the number of SMKs
related to maritime need to be increased. A maritime school graduate is an educated workforce that can immediately enter the workforce because the subjects are accompanied by practice skills. This differentiates graduates from marine college graduates. The number of districts / cities in the coastal area reaches 324 districts / city or reach 65.2 percent48. The total number of SMKs, both public and private, is sufficient enough, so that the quality of graduates of these vocational schools needs to be improved. The challenges faced to prepare qualified marine vocational graduates are lack of qualified instructors and industry integration.
Many instructors are lazy to teach in Vocational Schools because of low salaries and there is no incentive for the industry to accept internships.
Indonesia can follow the example of Germany where between marine and industrial Vocational Schools are integrated, instead the industry contributes equipment and is willing to accept paid internships.
Form incentives to the industry can be from land, taxes, equipment, and others.
Presidential Instruction No. 5 of 2005 concerning the Empowerment of the National Shipping Industry does not work properly as a result of parties who have received the mandate not yet able to coordinate properly. Maritime sector activities involve many agencies, such as the Ministry of Transportation, Ministry of Trade, Ministry of Finance, and Ministry of Maritime Affairs and Fisheries.50 Each ministry focuses on its tasks, main points and functions, even though these instructions involve the ministry. The success of maritime connectivity requires the support of many agencies / institutions, not only the Ministry of Transportation, the Ministry of Public Works, and the Ministry of Energy and Mineral Resources, but also the regional government, the Ministry of Finance as the state treasurer and the Ministry of BUMN.
shipping sector. Therefore, improving regional governance is also important to be the direction of
ICMST 2019 August, 1 2019 future development policies. The number of budgets
managed by local governments continues to increase, but it does not parallel the improvement in outcome performance. Efficient and effective use of regional budgets must be a policy agenda in the future for all levels of regional government. To realize this, local governments need to be encouraged to be more transparent, accountable, and participatory in managing their regional finances.
Accompanying these efforts, structuring regional government institutions, increasing coordination between levels of government, developing the capacity and professionalism of the apparatus, and improving licensing processes and mechanisms, are a number of important agendas in the future.51 The non-parallel causes of budgetary outcomes with improved performance results are due to parameter measurements which is more focused on the successful absorption of the budget amount, namely budget-based measurement. The existence of the Maritime Coordinating Ministry in this period can facilitate coordination between sectors in realizing maritime connectivity, but can also add to the intricacies between sectors.
Therefore, clear division of authority between agencies, quality and quantity. adequate meetings, strong leadership, and recognizing problems are key to overcoming the ego-sector constraints and coordination that has been occurring so far.
Infrastructure development also requires coordination between agencies, so many things need to be considered. The considerations are related to efforts to achieve a balance of development between regions and support the centers of economic growth through national connectivity. Another thing that is not less important is that in building infrastructure it is necessary to coordinate Central, Regional, BUMN and Private investment and increase the effectiveness and efficiency of infrastructure funding and the
development of creative financing schemes.
Therefore, there must be firmness in the criteria and scope of assignments of State-Owned Enterprises (SOEs) in infrastructure development and clarifying the authority between the center and the regions in the construction and maintenance of infrastructure.
In addition, there is a need to improve the quality of bankable Public and Private Partnerships (KPS) to ensure certainty for investors through the integration of the PPP process in the planning and budgeting mechanism for each infrastructure sector.
Thus infrastructure investments can be targeted to support the achievement of development targets, increase the efficiency of the use of infrastructure budget to maximize value for money, and form alternative funding mechanisms to close the funding gap (Funding Gap). experts are not needed. The most important thing to overcome the funding problem is socialization to banks regarding the promising maritime economic potential. The government and regional governments must also remove all rules and activities that are counter- productive for investment in maritime affairs, not only for infrastructure investment. If these two things are done, then the public banking will undoubtedly flock to fund investments in the maritime sector.
Infrastructure development faces cross-sector constraints. First, the issue of land acquisition. Often infrastructure development is constrained by difficulties in land acquisition for the sake of timely and costly infrastructure development. Second, institutional capacity which includes governance, relations between institutions, and human resource capacities that are often not optimal so that each views the interests of his own sector or institution so that he ignores a far greater public interest.
Therefore, priority issues are important to note so that the priority of cross-sector, cross-regional and inter-sectoral infrastructure development (national, provincial, district / city) becomes synchronous.
The aim of infrastructure development is to realize Indonesia's infrastructure conditions which reflect its status as a Middle Income country. This can be done using international comparison (international benchmarking) for identification: 1) key performance indicators (KPI) that are appropriate for each infrastructure sector; 2) Indonesia's competitive position towards competing countries; and 3) the gap between Indonesia and other countries.53 These benchmarks are needed in order to spur infrastructure development in accordance with community needs. Unequal infrastructure conditions between western and eastern Indonesia have caused key performance indicators to be unbalanced, so that adjustments need to be made to the indicator. The benchmark is also related to efforts to catch up with Indonesia compared to other countries in terms of attention to maritime development, so that the development of the shipping industry must be carried out immediately.
The Ministry of BUMN through shipping SOEs, such as PT PAL, is a motor for the national shipping industry. The competitiveness of the shipyard industry has been worse when it has to compete.
Domestic ship production prices are more expensive than imported vessels. Most of the addition of Indonesian flagged vessels from 6,041 units to 11,600 units occurred in the period 2005 - 2013.
Based on data from the Indonesian Ship and Offshore Industry Company Association, about 90 percent of the additional vessels are imported vessels, not ships produced in domestic shipyards.
The burden of import duty and component value added tax is thought to weaken the competitiveness of the shipyard industry.
National maritime connectivity realized and plan the next action that needs to be done. One of them is to make 24 main ports as port cities. The port city concept is a form of port area development, with a typical revenue structure of 60 percent port services and 40 percent property services. This
concept needs to be adopted for three reasons, namely: 1) port business risk mitigation, 2) increasing local government interest in participating and contributing to public expenditure, and 3) focusing on growth strategies.55 Governments and local governments can share authority in developing ports city and port city must have integration with industries that continue to grow so that the development of maritime connectivity can achieve the expected goals, namely to make maritime as a motor of the national economy.
On this basis, the development of the national shipbuilding industry through a number of incentives, starting from the release of certain taxes to incentives for ship users produced by national industries must continue to do. Policy support, in the form of policy planning, improvement of infrastructure conditions, development of human resource capacity, and coordination between sectors should be able to make.
4. CONCLUSION
The maritime connectivity policy is carried out by the Government in order to increase the efficiency and effectiveness of the distribution of goods, the flow of society between regions, and improve national competitiveness. Constraints faced in developing maritime connectivity policies can be divided into two, namely: port internal aspects and external aspects. Internal aspects consist of loading and unloading time, licensing bureaucracy, existing capacity, and human resources. The external aspect consists of problems in the availability of infrastructure, energy, technology and information, funding, and government will. Policy support must be made so that the maritime connectivity policy runs in accordance with the goals and objectives set are:
a. Policy Planning. Planning for maritime connectivity policies should be prepared based on the objectives to be achieved and divided based on
ICMST 2019 August, 1 2019 the set target time for the conditions owned, in terms
of the budget and characteristics of existing resources. The time period was prepared by involving all stakeholders, such as the regional government and business actors. Particularly for the eastern part of Indonesia which has lagged behind the western part of Indonesia, the Government should give wider attention. The plan was also compiled with prioritizing the active participation of stakeholders in the region, such as the regional government, business actors, and the community;
b. Improvement of Infrastructure Conditions.
Provision of adequate infrastructure capacity, including in the form of sea, air and road ports and efficient electricity and telecommunications networks, is absolutely necessary to keep pace with the rapid economic development, without which maritime connectivity policies will not work.
Infrastructure financing can also be done by the local government through the issuance of regional bonds;
c. Increased maritime HR capacity. Skilled human resources who understand the increase in maritime performance, including ports, shipyards, and fishing procedures are very necessary. Reliable human resources will be able to improve technological innovation and control of the maritime sector by national stakeholders;
d. Coordination between agencies. The development of maritime connectivity requires cooperation from all stakeholders, both the Government, BUMN, and business actors.
Government agencies must sit together to solve the most difficult problems, namely from the aspect of
coordination. Each party must understand their respective duties and authorities.
REFERENCES
Dachlan, Junaidi dan Sultan Suhab (Editor), Makassar: Research Center for Policy and Management, Institute for Research and Community Service, Hasanuddin University, 2014.
Fauzi, Akhmad, Fisheries and Marine Policy: Issues, Synthesis, and Ideas, Jakarta: PT Gramedia Pustaka Utama, 2005.
Gultom, Elfrida, Functionalization of Port Arrangements to Improve National Economy, Jakarta: PT. Raja Grafindo Persada, 2007.
Oktaviani, Rina, Economic Model of General Balance: Theory and its Application in Indonesia, Bogor: IPB Press Publishers, 2011.
Prasetyantoko, A., Economic Ponzi, Jakarta:
Kompas Book Publisher, 2010.
Prasetyantoko, A, S. Bahagijo, dan S. Budiyanto,
"Prospects and Challenges of Inclusive Development in Indonesia" in Inclusive Development: Prospects and Challenges of Indonesia, Jakarta: Publishers LP3ES, 2012.
Priatna, Dedy S., "National Development Policy Framework for Infrastructure Development in 2015 - 2019", Eastern Indonesia Development in the Context of Indonesian Present, Editor Junaidi Dachlan and Sultan Suhab, Makassar:
Research Center for Policy and Management, Institute for Research and Community Service, Hasanuddin University, 2014.
Safitri, Dini dan Budinono. Observing Indonesia's Economic Development, Surabaya:
Publishers of the Ubaya Faculty of Business and Economics and Surabaya Economic Lecturer Forum, 2014.