Enhancing ASEAN's Connectivity

5. Challenges for Building Better Transportation Infrastructure Linkages Across ASEAN: Indonesia's Perspectives Towards an Integrated Asian Economic Community

5 Challenges for Building Better transportation infrastruCture linkages aCross asean: indonesia’s perspectives towards an integrated asian economic Community Bambang Susantono introduction To meet the challenges in a global marketplace, ASEAN needs to integrate its member countries and achieve a more dynamic economy, which is inclusive and sustainable. ASEAN leaders are conscious of the increasing interdependence of their economies within the region as well as the rest of the world, and hence aim to implement the ASEAN Economic Community (AEC) by 2015. This vision requires a well-connected ASEAN that will lead to a more competitive and resilient ASEAN. This is expected 60 Bambang Susantono to be realized through ASEAN connectivity. ASEAN leaders agreed on the concept of ASEAN Connectivity during the 15th ASEAN Summit in Cha-am Hua Hin on 24 October 2009. The country leaders observed that the strategic location of ASEAN has the potential to physically anchor itself as the transportation, information and communication technology, and tourism hub of the region. The Master Plan on ASEAN Connectivity was subsequently adopted one year later by the ASEAN Heads of State at the 17th ASEAN Summit on 28 October 2010. The Master Plan is expected to accomplish the following goals within the region: 1) enhance trade, investment, tourism, and development; 2) narrow development gaps; and 3) facilitate people-to-people contacts. Furthermore, the connectivity is expected to enhance the attractiveness of ASEAN as a foreign direct investment (FDI) destination and to encourage better integration of production and innovation networks in the region. A well-connected ASEAN may be achieved through three kinds of connectivity, i.e. physical, institutional, and people-to-people connectivity. Physical connectivity entails an enhanced physical infrastructure (including transport infrastructure, i.e. road, rail, air, and sea linkages), while institutional connectivity refers to effective institutions, mechanisms , and processes. Finally, people-to-people connectivity is meant to empower people. To realize ASEAN connectivity, it is important to emphasize that the development gaps among the ASEAN member countries is a major issue that needs attention and immediate action. Less developed countries should be given a chance to catch up with their more developed counterparts . This requires a concerted effort in ASEAN in form of new policies that could support strong and sustainable growth in the region. In the transportation sector, in particular, infrastructure networks that connect the entire ASEAN region are of high importance. However, to attain such connectivity is a challenge for ASEAN member countries. This chapter aims to discuss how regional and domestic connectivities are interrelated and how the success of regional connectivity would depend on domestic connectivity of individual countries in the region. Conscious effort is essential to improve transport linkages in the ASEAN region and narrow the development gap between less and more developed ASEAN members. Finally, this chapter provides policy directions that will be useful in planning and accelerating regional connectivity. Challenges for Building Better Transportation Infrastructure Linkages Across ASEAN 61 how regional Connectivity improves local economy To have an efficient ASEAN connectivity, each country in the region needs to strengthen its domestic connectivity as it is important in supporting the national economy. Poor domestic connectivity can jeopardize the developments in the national economy. Poor domestic connectivity limits local economic growth and even distribution of economic wealth. In the context of ASEAN, domestic connectivity must support all efforts to narrow the development gaps among its member countries and to reduce pockets of poverty. Most of the bigger ASEAN countries have areas that are still isolated, both economically and geographically. As a result, the potential of these areas cannot be fully exploited. Domestic connectivity needs to be increased through, inter alia, the development of ICT for better flow of information to all areas of the country. National connectivity may also be improved through a better transport infrastructure network. Table 5.1 shows the positive impacts of connectivity on the poor. Better roads can directly improve the poor’s access to employment and public services. Urban mass transit increases the access to employment opportunities as it gives them freedom of mobility. ICT helps the poor through better access of knowledge, enabling them to be involved in the wider community. As ASEAN connectivity aims to narrow the development gap, the local economy should be aligned with the regional economy. Local economy’s alignment will enable smoother flow of labour and capital, so that the gap between lagging regions and developed regions can be reduced...