Special Talking ASEAN on Infrastructure

12 November 2014

The New Government's Readiness Towards ASEAN Economic

Community 2015: Building Infrastructure to Increase Competitiveness

By Ilham A. Habibie

The New Government's Readiness

Towards ASEAN Economic Community

2015: Building Infrastructure to Increase

Competitiveness Wednesday, 12 November 2014

15th Anniversary of The Habibie Center

Dr.-Ing. Ilham A. Habibie, MBA

Vice Chairman, KADIN Research & Technology

Source: Edelman Indonesia’s South East Asia Public Affairs team

Global Competitiveness

Index 2014-2015

Source: WEF The Global Competitiveness Report 2014-2015

Competitiveness Aspects Cambodia Indonesia Malaysia Myanmar Philippines Thailand Vietnam

Quality of Overall infrastructure 109 72 20 138 95 76 112

Quality of Roads 93 72 19 134 87 50 104

Quality of railroad infrastructure 98 41 12 94 80 74 52

Quality of port infrastructure 97 77 19 125 101 54 88

Quality of air transport infrastructure 106 64 19 137 108 37 87

Available airline seat km/week, millions 83 14 22 86 25 15 30

Quality of electricity supply 110 84 39 117 87 58 88

Mobile telephone subscriptions/100 pop 39 54 30 144 86 34 42

Fixed telephone lines/100 pop 116 71 73 125 113 91 86

Logistic Costs

Country Logistic Costs (% GDP)

USA 9.9

Japan 10.6

South Korea 16.3

Singapore 8.0

Malaysia 13

Thailand 20

Vietnam 25

Indonesia 27

Source: Annual Logistics Report compiled by ITB, ALI, STC,

Panteia, and the World Bank Indonesia Office, 2014

McKinsey Study (November 2014)

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(1) Capturing a greater share of global flows. The

global economy has become deeply interconnected as

huge volumes of goods, services, capital, people, and

data move across borders. Southeast Asia can

capitalize on this phenomenon b accelerating

implementation of the ASEAN Economic Community

integration plan to create a single market of 600

million consumers.

Southeast Asia at the crossroads:

Three paths to prosperity

McKinsey Study (November 2014)

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(2) Riding the urbanization wave. The booming

cities of Southeast Asia account for more than 65

percent of the region’s GDP today, and more than

90 million people are expected to move to urban

areas by 2030. ƒ

(3) Deploying disruptive technologies. Five

related technologies—the mobile Internet, big

data, the Internet of Things, the automation of

knowledge work, and cloud technology— could

modernize sectors across the economy and drive

major productivity improvements.

Characteristics of needed

Infrastructure

(1) Connectivity of infrastructure is key

(1) Urban infrastructure needs to be a

strong focus

(1) Digital infrastructure as ‘meta

infrastructure’

Keywords: smart

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National ICT Structure

INFRASTRUCTURE

ICT FOR

GOVERNMENT

ICT FOR

HEALTH

ICT FOR

ECONOMICS

NATIONAL ICT INDUSTRIAL DEVELOPMENT

ICT FOR

EDUCATION

2015 ASEAN Economic Community

Indonesia

Country with Economy

based on Innovation and Knowledge

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BROADBAND NETWORK

Source : Telkom Indonesia

BANDA ACEH

PALEMBANG

DENPASAR

KUPANG

DLI

BDR LAMPUNG

MANADO

FAKFAK

MERAUKE

JAYAPURA

PALU

PADANG

PEKANBARU

PONTIANAK

BANDUNG

AMBON

SORONG BALIKPAPAN

JAKARTA

BATAM

MATARAM

PAREPARE

SAMARINDA

SINGAPORE

PENANG

SATUN

SEMARANG

BANJARMASIN

MAKASAR

SURABAYA

MEDAN

Songkhla

TIS (Thailand)

SANGATA

BATURAJA

TIMIKA

MALAKA

BENGKULU

WAINGAPU

KETAPANG

PKL.BUN

AAG (Hongkong. USA)

JAMBI

TERNATE

R 1B Y-2009

R-1A Y-2006

R-2 Y-2006

R-3 TERESTERIAL

Y-2006

R 3 SUB MARINE Y-2006

R-4 Y-2010

R-5 Y-2004

R-6 Y-2004

R-7 SUBMARINE Y-2008

R-9 SUBMARINE Y-2009

KUPANG-ATAMBUA Y-2012

MKCS TERRESTERIAL

Y-2011

R-8 TERRESTERIAL Y-2009 R-8 SUBMARINE

Y-2010

TUTUYAN

LUWUK

KAUDITAN

SOFIFI

LABUHA SANANA

NAMELA MASOHI BULA

BANDANERA

KAIMANA

BIAK

KENDARI

MANUKWARI

SARMI

MAUMERE

ENDE

RUTENG L. BAJO

SUMBAWA

RABA

BENCULUK

JOGYAKARTA

BANGKINANG

KLRJ

LINGGAU

M.BNG

PKL.PINANG

TJ.PANDAN

TASIK

JATINEGARA CIREBON

TARAKAN

SINTANG

TN.GRGT PALANGKARAYA

SINGKAWANG

SANGGAU

TN.GUNING

TJ. REDEP

MR.TWH

BUNTOK

TJ.TABLONG

JENEPONTO

SENGKANG

PALOPO

TPOSO

PARIGI

MAJENE

MAMUJU

DONGGALA

BONEPUTE RANTEPAO

SANTIGI

ISIMU

GORONTALO

OMPU

AMURANG

KOLAKA

WATAMPONE

MKCS SUBMARINE

Y-2011

ATAMBUA

DUMAI

Sorong-Fakfak Y-2014

Atambua-Maumere-Makasar Y-’13-14

BALI-LOMBOK-KUPANG Y-2013

Atambua-Ambon Y-2017

Timika-Merauke Y-2020

Atambua-Timika Y-2020

Watampone-Kolaka Y-2013

Guam Y-2017

PALAPA RING 10

Y-2013

Satellite TELKOM 3S

International

Gateway

Second Internationa

l Gateway

Express Super Core Batam -

Manado

: existing : on going : planned

Legend :

National Coverage : Optical Transport of 75.000 Km covering 2015 90% of the Kabupaten’s capitals Express Super Core for the 2nd International Gateway in 2015 Satellite Telkom 3S to be launched in 2016

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IMPACT OF THE IMPLEMENTATION OF

BROADBAND

Without Broadband With Broadband

Politics • Bureaucratic problems

• Not integrated

• Not transparent

• Less democratic

• Fast response regarding citizen

complaints

• Integrated

• Transparent

• More democratic

Economy • Less Growth

• Higher unemployment

• Economy & environment less

sustainable

• Higher Growth

• Lower unemployment

• Economy & environment more

sustainable

Social • More easily divided

• Social interaction needs more effort

• Social interaction more effective

and efficient

Culture • Preservation and cultural interaction

low

• Lack of recognition and appreciation

of national culture

• Preservation and cultural

interaction high

• Better recognition and appreciation

of national culture

Science &

Technology

• Overly dependent on foreign

sources

• Less developed

• Local culture growth

• Push for innovation culture in

society

• Better national technology

development

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PILOT PROJECT implementing at six (6) cities / districts in

Indonesia:

Kota Pekalongan (Jateng), Kab. Banyuwangi (Jatim), Kab.

Banyuasin (Sumsel), Kab. Jembrana (Bali), Kota Balikpapan

(Kaltim), Kab. Minahasa Utara (Sulsel).

PILOT PROJECT CITY / REGENCY

Institute for Democracy

through Science &

Technology (IDST)

Meaningful Broadband Indonesia (MBI)

initiative in collaboration with Digital

Divide Institute, USA:

• Useable

• Affordable

• Empowering

Big Question:

How to Finance (1/2)

Public Sector

(1) Most likely majority of projects

(2) There will be many projects which are

not feasible otherwise

(3) Through BUMN/BUMD as well

Private Sector

(1) Projects have to be commercially

feasible

(2) Monopolies of BUMN/BUMD? 14

Big Question:

How to Finance (2/2)

Public – Private Partnership (PPP)

There has to be revenue base

Weak track record so far

Innovative schemes necessary (e.g. for

ICT)

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Terima kasih

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