economic profil of jakarta
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TASK:What forces shape the vitality and structure of producer services and/or creative industries and/or tourism in your global city region (1500 words, 30%)? a) outline the major forces that shape the development of global city regions; b) illustrate how one or more of the forces are felt in any (you may discuss one or two or all) of the three economic sectors (i.e., producer services, creative industries, and tourism) in your GCR. With regard to the development of your global city region, the essay could include one or more areas in economic specialization, infrastructure improvement, and institutional integration. You are encouraged to use maps to illustrate spatial changes in your GCR.
GlossariesIn Indonesia, there are two types of administrative terminology used for city, they are Kotamadya and Kabupaten. This paper uses city to replace Kotamadya and Regency to replace Kabupaten. Services and Urban Tourism in Jakarta City RegionThis essay will discuss the major factors of the Jakarta City Region (JCR) development in the context of city regions. This essay firstly claims that JCR experiences economic restructuring regarding two different sectors. The first economic specialization rests on the services sector in the core city while the second sector is manufacturing which mostly located in peri-urban area. This essay also argues that the tourism industry is also a growing economic sector in Jakarta City Region beyond the national boundary. The first section of this essay will explore the economic restructuring of Jakarta City Region. Analysis regarding the economic specialization of JCR and its spatial distribution will be presented. Secondly, this essay will analyze the development of urban tourism in JCR, focusing on MICE and shopping tourism. Then short conclusion will close the essay.
IntroductionThis preliminary discussion aims to introduce the reader with the economic profile of Jakarta City Region. The table 1 shows the development of GDP for each municipality in this city region. DKI Jakarta, as the core of this city region, predominated the GDP income in the three recent years (figure 1) which indicates that this core is still economically dominant within this city region. Figure 1. GDP Distribution in Jakarta City Region (%)
Source: BPS DKI Jakarta (2014), BPS Kota Bekasi (2014), BPS Kabupaten Bekasi (2013), BPS Kabupaten Tangerang (2013), BPS Kota Tangerang (2013), BPS Kota Bogor (2013), BPS Kabupaten Bogor (2013), BPS Kota Depok (2013) Economic Restructuring of Jakarta City RegionJCR has experienced economic restructuring from manufacturing to services sector that predominantly occurred in the core area of this city region. In 1993, for example, manufacturing was the dominant sector in DKI Jakarta contributing 25.85% of the total GDRP, while finance and business service sector was only 17.61%. In 2008, the rate of the manufacturing sector decreased to 16.44% while the service and business sector increased to 29.41% (BPS 1993, 2008, in World Bank, 2012). In addition, Salim (2013) also demonstrates that the concentration of services and business sector in the JCR is extremely dominant in the core area (DKI Jakarta) shown by the service employment density map and trade density map below. Service and trade employment density map of JCR in 2000 Source: Salim, 2013
An example of the concentration of services sector of JCR will be exemplified by the data of financial sector. Sassen (2001) mentions that finance plays an important role in supporting other economic activities in the city by providing loans for other businesses, thus, the existence of this sector is very significant for global cities as a producer service. Furthermore, in terms of spatial distribution, central offices of producer services usually concentrate in the center of the city region (Han et al, 2009).Two forms of service producer in the financial sector which are banking and insurance will be presented as follows. The first table shows the location of foreign bank offices, foreign bank representative offices, and mix bank offices that entirely located in DKI Jakarta the core area of this city region. According to Firman (1998), the growth of this sector emerged in October 1988 after the national government permitted the operation of foreign banking sector in Indonesia. Several foreign banks only place their representative offices without fully operate. Some other banks are categorized as mix banks because their share were partially held by the local companies even though they are originally from outside Indonesia. Furthermore, the second table presents the list of insurance firm central offices that located in the core area of JCR. This fact supports the discussion that central offices of producer services in JCR are concentrating within the core area. Besides that, in the context of global city, the presence of these foreign firms also demonstrates that this core area of JCR is also connected with the global economic system. This condition is in line with the main characteristic of global city in which finance and business services is one of the drivers of the urban economics (Hutton, 2004).Table .Foreign Banks in Jakarta City Region, 2013NameCountry of OriginCentral Office Location
Foreign Bank Representative offices
JAPAN BANK FOR INTERNATIONAL COOPERATIONJapanDKI Jakarta
SUMITOMO MITSUI TRUST BANK. LTDJapanDKI Jakarta
THE EXIM BANK OF REF.OF CHINATaiwanDKI Jakarta
UNITED OVERSEAS BANK (UOB)SingaporeDKI Jakarta
ICICI BANKIndiaDKI Jakarta
BANK OF INDIAIndiaDKI Jakarta
WESTPAC BANKING CORPORATIONAustraliaDKI Jakarta
THE BANK OF NEW YORK MELLONUSDKI Jakarta
WELLS FARGO BANK, N.A.USDKI Jakarta
ING BANK NVNetherlandDKI Jakarta
NATIXISFranceDKI Jakarta
LANDESBANK BADEN-WURTTEMBERGGermanyDKI Jakarta
DRESDNER BANK AGGermanyDKI Jakarta
COMMERZBANK AG.GermanyDKI Jakarta
EFG BANKSwitzerlandDKI Jakarta
UNITED BANK OF SWITZERLAND AG SWISSSwitzerlandDKI Jakarta
Foreign Banks
BANK OF AMERICA, N.AUSDKI Jakarta
BANK OF CHINA LIMITEDChinaDKI Jakarta
CITIBANK N.A.USDKI Jakarta
DEUTSCHE BANK AG.GermanyDKI Jakarta
JP. MORGAN CHASE BANK, N.A.USDKI Jakarta
STANDARD CHARTERED BANKUKDKI Jakarta
THE BANGKOK BANK COMP. LTDThailandDKI Jakarta
THE BANK OF TOKYO MITSUBISHI UFJ LTDJapanDKI Jakarta
THE HONGKONG & SHANGHAI BANKING CORPUKDKI Jakarta
THE ROYAL BANK OF SCOTLAND N.V.UKDKI Jakarta
Mix Bank
BANK COMMONWEALTHAustraliaDKI Jakarta
BANK AGRISGermany (Commerzbank), UK (Barclay Bank), US (Chemical Bank)DKI Jakarta
BANK ANZ INDONESIAAustralia and NZDKI Jakarta
BANK BNP PARIBAS INDONESIAAustraliaDKI Jakarta
BANK CAPITAL INDONESIAFrance (LCL) and Malaysia (Maybank)DKI Jakarta
BANK DBS INDONESIASingaporeDKI Jakarta
BANK KEB INDONESIAKoreaDKI Jakarta
BANK MAYBANK SYARIAH INDONESIAMalaysiaDKI Jakarta
BANK MIZUHO INDONESIAJapanDKI Jakarta
BANK RABOBANK INTERNATIONAL INDONESIANetherlandDKI Jakarta
BANK RESONA PERDANIAJapan (Resona Bank), Hong Kong (Bank of East Asia)DKI Jakarta
BANK WINDU KENTJANA INTERNATIONAL-DKI Jakarta
BANK WOORI INDONESIAKoreaDKI Jakarta
BANK CHINATRUST INDONESIATaiwanDKI Jakarta
BANK SUMITOMO MITSUI INDONESIAJapanDKI Jakarta
Source: Bank Indonesia (2015a; 2015b) Table . Large and Foreign Insurance Firms in Indonesia, 2014Name of Insurance FirmCentral Office Location
ACA AsuransiDKI Jakarta
AIADKI Jakarta
ChartisDKI Jakarta
AXADKI Jakarta
WintherturDKI Jakarta
HartaDKI Jakarta
Sinar MasDKI Jakarta
Assist-Card GSA IndnesiaDKI Jakarta
PT. Asuransi Grasia UnisaranaDKI Jakarta
PT. Zurich Insurance IndonesiaDKI Jakarta
PT. Asuransi Allianz Utama IndonesiaDKI Jakarta
PT. ACE Ina InsuranceDKI Jakarta
PT. Asuransi Umum Mega InsuranceDKI Jakarta
PT. China Taiping Insurance IndonesiaDKI Jakarta
PT. Lippo Insurance Tbk.DKI Jakarta
PT Assurance Adira DinamikaDKI Jakarta
Asuransi MAGDKI Jakarta
Source VSF, 2014
While the economic restructuring occurred in the core area of JCR, on the other hand, manufacturing became more intense in the peri-urban area of this city region. This condition is illustrated by Hutton (2004) who argue that the decline of manufacturing sector in the core of global city region will take place and the manufacturers will move to the peri-urban area of the city region. Firman (1998) also argues that one characteristic of the global city in Asia is the spatial division of labor in which the function in core area is different with the function of the periphery area of the city region.
Spatial Distribution of Industry and Industrial Estates in JCR, 2011-2012
Source: JICA, 2012
The economic restructuring of JCR impacts the physical structure of this city region. Since the inner city became highly significant and condusive for services and business activity, the land price within this area extremely increased (Han.). This condition is one factor that pushes the outward development of this city region.
The following section will discuss the property development of JCR. It focuses on the large residential development and new town development in JCR. According to Winarso (2010), the development of large residential area in JCR spread out to the second-tier cities of JCR. The map below shows the spatial distribution of new residential areas in JCR. It is observed that the trend of this new development is around the western area of JCR, comprising Tangerang City and Tangerang Regency.
Those new residential development, to some degree, has created urban sprawl in JCR. The three maps below present the development of built-environment in JCR from 1995, 2000, and 2005 respectively. Source: IPB (2010)Urban Tourism in JCRThe most dominant tourism sub-sector in Global City Region is urban tourism such as shopping centre and mall (Han et al, 2015). This section will discuss the spatial distribution of shopping centres and malls in JCR area.
Number of international flightsYearInternational
DepartureArrivalTransit
200835870773457124138247
20093738056351467882706
201047949344782401549117
201147949344782401549117
20125720583580390023227
Source: BPS DKI Jakarta (2013)
Winarso (2010)
Winarso (2010)
Important reference:Winarso (2010)Firman (2010)Winarso et al (2002) Residential land development in Jabodetabek, Indonesia: trigerring economic crisisWinarso et al (2015) Peri-urban transformation in the Jakarta metropolitan areahttp://www.rap-japan.net/english/research_pdf/Indonesia/Indonesia_PropertyMarketOutlook-SingaporeApr2013.pdfhttp://www.colliers.com/-/media/files/marketresearch/apac/indonesia/jkt-1q2015-r1.pdfhttp://www.bi.go.id/id/publikasi/laporan-keuangan/alamat-bank/umum/Default.aspxhttp://www.bi.go.id/id/publikasi/laporan-keuangan/alamat-bank/asing/Default.aspx
Hutton, TA 2004, Service Industries, Globalization, And Urban Restructuring Within The Asia-Pacific: New Development Trajectories And Planning Responses, Progress in Planning, Vol 61, pp. 1-73.
http://www.vfsglobal.com/spain/indonesia/images/list_of_insurance_companies_1204.pdf