‘Aerotropolis’ Could Be Key to Making Indonesia Competitive

By webadmin on 07:59 pm Jun 26, 2012
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Shoeb K. Zainuddin

Connectivity is the buzz word today in the corridors of power and in corporate boardrooms around the world. Corporations and governments are keenly aware that to get maximum economic benefit from globalization, they must be connected to the global economic grid.

While the Internet has been a powerful force in enabling connectivity, old economy infrastructure such as airports are seen to be just as important in connecting people and moving goods.

But the airports of tomorrow will be very different from those that exist today. So different that a new word has been coined to best describe them.

University of North Carolina professor John Kasarda has come up with the “aerotropolis” concept, which defines the role of aviation and airports in shaping 21st century business location, urban competitiveness and economic growth.

In keeping up with such developments, Indonesia will host the first ever Global Airports Indonesia conference on Tuesday and Wednesday, bringing together some of the world’s foremost experts on airport development and infrastructure.

The conference will be hosted by Angkasa Pura, which manages 25 commercial airports in the country that handle more than 80 percent of the country’s traffic, and is being organized in cooperation with the US Commercial Service.

In an interview with the Jakarta Globe, US ambassador to Indonesia, Scot Marciel, noted the need for infrastructure development is now widely acknowledged, but accelerating major projects has been a challenge.

“I think everybody I have talked to in Indonesia who follows the economy agrees that while Indonesia’s economic growth has been admirably strong, better infrastructure would allow it to grow faster and better infrastructure over time will help it to sustain this level of growth,” he said.

“There is recognition from the business community as well as the government that more needs to be done, especially in aviation due to the very rapid growth of airlines and air travel.

“It is pretty clear that there is a need for more development of the aviation infrastructure at large and so the government feels that this is one area where US companies can be most helpful.”

The US Commerce Service therefore decided to partner with Angkasa Pura to put together the conference to bring together more than 30 US companies who are strong in this area in the hope of giving airport development a spur.

“There is already a fair amount of airport construction happening but everybody agrees that we need more, including improvements in air traffic control and air safety, radar and other factors that enable the aviation industry to grow safely,” Marciel added.

US companies participating in the conference include Boeing, Boeing Flight Navigation, Lockheed Martin, Arinc (an aviation communications company), Honeywell and HOK (a global design, architecture and planning firm). Indonesian speakers at GAI will include State Enterprises Minister Dahlan Iskan, Angkasa Pura I president director Tommy Soetomo, real estate developer Ciputra and Rusdi Kirana, president director and co-founder of Lion Air.

Marciel noted that the US Commercial Service has been active in the region for some time in promoting business but this is the first time it is involved in organizing an aviation infrastructure conference.

“There are two things here — the need for Indonesia and the desire to promote more US-Indonesian business so hopefully this conference takes advantage of both needs,” he said.

With Asia growing rapidly and taking a larger role on the global stage, the United States is also paying greater attention to the region. President Barack Obama’s administration announced its pivot back to Asia late last year as it sought to rebalance its engagement with the region compared to other regions, in particular the Middle East.

GAI is part of this process, Marciel said. “We hope this conference can be a stepping-stone to something bigger,” he said.

Airports, he noted, are linked to Indonesia’s competitiveness. He recently returned from Makassar and Ambon, where he noted the local fishing industry faced difficulties bringing its products to consumers.

“We are having the same discussions in the US,” Marciel said of infrastructure and economic competitiveness. “You have to keep moving. This is a significant conference and we hope to see results but it should be seen in the overall context of building more links between our two countries on the commercial side but also broadly.”

The United States and Indonesia have strong trade and investment relations. But Marciel emphasized there was room for it to grow further. In 2011, Indonesian exports to the United States reached $19 billion while US exports to Indonesia reached $7.5 billion.

“Last year, the Overseas Private Investment Corporation held its global conference in Indonesia and this year we have this big aviation infrastructure conference,” Marciel said. “What we are trying to do is create opportunities that bring businesses together and hopefully create some momentum because while it’s true that most of the initiatives must come from the private sector, governments can help by having events that encourage companies to talk about opportunities.”

Jakarta’s international airport, Soekarno-Hatta, has long exceeded the capacity it was designed to service, and plans are afoot for an expansion.

The conference, taking place at the Ritz-Carlton Pacific Place, has as a media business partner BeritaSatu Media Holdings, of which the Jakarta Globe is a part.