Oke Susanti Jakarta Bante Infacture
Oke Susanti Jakarta Bante Infacture
Province and West Java Province) - African continental free trade area
(AfCFTA): projected economic impact
assessment under future warming in
To cite this article: F Novitasari et al 2020 IOP Conf. Ser.: Earth Environ. Sci. 592 012017 CMIP6
Nkongho Ayuketang Arreyndip
1. Introduction
The development of infrastructure has a positive impact on human activities. The construction of the
Trans Java Toll Road can change agricultural into non-agricultural activities (urban activities) that will
further increase the economic activity [1]. At one research argues that the construction of a bridge
connecting the two islands in Indonesia is sufficient to involve economic inspectors between the two
islands and reduce inter-island finance [2]. However, the other study argues that infrastructure
improvement has a small role in driving the economy, household income, and encouraging labor if
being compared to industrial sector improvement [3].
Infrastructure Development is the epicenter of the development center of other activities such as
socio-economic, welfare, and prosperity of the community, as infrastructure facilitates the
community's activities. There is a research that explains the complex relationship between the
infrastructure and the economy. On one side, infrastructure can reduce production costs from
industrial processes. On the other side, in some developing countries, for example, there has been a
decline in exports due to increased transportation costs and the inability to provide ports. [4]
The increasing demand for infrastructure as a result of changes in economic activity and socio-
cultural society has an impact on the government's efforts in developing infrastructure. The
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IOP Conf. Series: Earth and Environmental Science 592 (2020) 012017 doi:10.1088/1755-1315/592/1/012017
government faces three main challenges in maintaining infrastructure and improving its level of
service. First, the construction of facilities and infrastructure requires a very large capital, a long
payback period, extensive land use, high technology utilization, and the planning, and implementation
process needs a long time to reach a certain economic scale. However, the ability of the national
economy is currently very limited, both government and the private sector funds. Second, the
construction of facilities and infrastructure is a precondition for new development opportunities in
various fields. Population growth encourages additional facilities and infrastructure services provision.
Third, facing global competition as well as meeting the demands of the community for facilities and
infrastructure services require restructuring in the operation of facilities and infrastructure services. To
accelerate Indonesia's economic recovery, the construction of facilities and infrastructure along with
the supporting services is carried out by taking into account the following criteria: (1) create a large
number of jobs, either directly or indirectly; (2) support regional economic development; (3) create
maximum economic benefits to the communities adjacent to the infrastructure projects; and (4)
economically and financially feasible to attract domestic and foreign investors. Previous research uses
attributes in determining regional development, namely the Regional/Regional GDP per capita and the
Human Development Index (HDI) [5]. Another challenge for a large country such as Indonesia is
infrastructure provision to support economic activities. One of the crucial things is the infrastructure
that boosts connectivity between regions to accelerate and expand Indonesia's economic growth.
Improved connectivity will reduce transportation costs and logistics costs, increase product
competitiveness, and accelerate economic mobility. Therefore, this study aims to identify the impact
of infrastructure on economic growth. The scope of this study includes all regencies and cities in three
provinces, namely West Java, DKI Jakarta, and Banten. The three provinces are chosen because of the
strong connection between economic activities and infrastructure among them. Also, community
activities in the three provinces are interrelated, resulting in opportunities for economic investment
growth to increase. It is expected that in the future cities in the three Provinces can become samples
for developing urban infrastructure to support sustainable development in other provinces.
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IOP Conf. Series: Earth and Environmental Science 592 (2020) 012017 doi:10.1088/1755-1315/592/1/012017
Indicators References
Length of Road - Prasetyo, Firdaus, 2009
- Maqin, 2011
- Maryaningsih, Hermansyah, Savitri (2014)
- Palei, 2014
- Ismail, Mahyideen, 2015
- Warsilan, Noor, 2015
- Cutanda, A., & Paricio, J., 1994
- Lestari, Suhadak, 2019
Educational facilities - Maqin, 2011
- Maryaningsih, Hermansyah, Savitri, 2014
- Palei, 2014
- Cutanda, A., & Paricio, J., 1994
Clean water infrastructure - Prasetyo, Firdaus, 2009
- Warsilan, Noor, 2015
- Cutanda, A., & Paricio, J., 1994
- Lestari, Suhadak, 2019
Electricity infrastructure - Prasetyo, Firdaus, 2009
- Maqin, 2011
- Maryaningsih, Hermansyah, Savitri, 2014
- Palei, 2014
- Cutanda, A., & Paricio, J., 1994
- Lestari, Suhadak, 2019
Medical infrastructure - Maqin, 2011
- Palei, 2014
- Warsilan, Noor, 2015
- Cutanda, A., & Paricio, J., 1994
There is a study that uses panel data estimation techniques and identifies that the average school
tenure, electricity, roads, port loading and unloading, and the level of trade openness significantly
affects economic growth [8]. Moreover, there is a research used regression analysis in assessing the
impact of infrastructure on economic growth. The analysis result states that road, railroad,
transportation infrastructure, and electricity have positive effects on economic growth and the level of
global competition [9]. Other research uses the augmented gravity model method in identifying the
impact of infrastructure on economic growth and stated that variable road networks, air transportation,
railroads, ports, logistics, and information infrastructure can have a positive influence on the level of
trade in Asia [10]. Furthermore, a regression method has been used in identifying regional
infrastructure and economies in Spain. They suggest that transportation and communication indicators
have significant impacts on the regional economy [11]. In one study, they use the regression method
and the Analytical Hierarchy Process (AHP). They suggest that the indicators of clinics, clean water,
and roads have a positive influence on economic improvement and reducing poverty [12]. The
addition of road lengths and road facilities is a priority for increasing economic growth. The use of the
PLS inner model method in identifying the effect of infrastructure development on Indonesia's
economic growth, they conclude that variables that positively affect economic growth include road
infrastructure, electricity, and clean water [13]. These indicators are presented in Table 2.
Table 2. Economic growth dan infrastructure indicator. (Source: Desk Study, 2020)
Criteria Indicator
Economic Growth Gross Domestic Product (GDP)
Human Development Index
Head Count Index (HCI) of Poverty
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Criteria Indicator
Infrastructure Transportation (Road)
Sanitation
Electricity
Clean Water
Educational Facilities
Medical Facilities
Waste infrastructure
Indicators for economic growth are defined by Gross Domestic Product (GDP), the Human
Development Index, and Head Count Index (HCI) of poverty. Transport infrastructure is represented
by the length of roads. Sanitation is represented by the percentage of improved sanitation. Electricity
is represented by the percentage of electricity use. Clean water infrastructure is represented by the
percentage of piped water. Educational facilities are represented by several indicators, namely the
number of elementary schools, the number of junior high schools, the number of senior high schools,
and the number of universities. Furthermore, medical facilities are represented by the number of
hospitals, and the waste management system is used as an indicator of waste infrastructure.
3. Case Study overview: DKI Jakarta, Banten Province, and West Java Province
The research area includes the provinces of DKI Jakarta, Banten, and West Java. These three
provinces are the parts of the Greater Jakarta metropolitan areas (Jakarta, Bogor, Depok, Tangerang,
Bekasi). The Regencies and Cities in all three provinces and the area of each regency/city can be seen
in Table 3.
Tabel 3. Regency and City Area in DKI Jakarta, Jawa Barat Province, and Banten Province.
(Source: BPS, 2019)
No Regency/City Area (ha) No Regency/City Area (ha)
Jawa Barat Province 22 Cirebon City 37,36
1 Bogor Regency 2710.02 23 Bekasi City 206.61
2 Sukabumi Regency 4145.7 24 Depok City 200.29
3 Cianjur Regency 3840.16 25 Cimahi City 39.27
4 Bandung Regency 1767.96 26 Tasikmalaya City 171.61
5 Garut Regency 3074.07 27 Banjar City 113.49
6 Tasikmalaya Regency 2551.19 DKI Jakarta
7 Ciamis Regency 1414.71 1 Kepulauan Seribu 8.7
8 Kuningan Regency 1110.56 2 Jakarta Selatan City 141.27
9 Cirebon Regency 984.52 3 Jakarta Timur City 188.03
10 Majalengka Regency 1204.24 4 Jakarta Pusat City 48.13
11 Sumedang Regency 1518.33 5 Jakarta Barat City 129.54
12 Indramayu Regency 2040.11 6 Jakarta Utara City 146.66
13 Subang Regency 1893.95 Banten Province
14 Purwakarta Regency 825.74 1 Pandeglang Regency 2746.89
15 Karawang Regency 1652.2 2 Lebak Regency 3426.56
16 Bekasi Regency 1224.88 3 Tangerang Regency 1011.86
17 Bandung Barat Regency 1305.77 4 Serang Regency 1734.28
18 Pangandaran Regency 1010 5 Tangerang City 153.93
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IOP Conf. Series: Earth and Environmental Science 592 (2020) 012017 doi:10.1088/1755-1315/592/1/012017
According to [14], DKI Jakarta is the capital city of Indonesia, having a land area of 662.33 km2
and an ocean of 6,977.5 km2. DKI Jakarta has 110 islands spread across the Kepulauan Seribu
Regency. As the nation's capital, DKI Jakarta consists of one administrative Regency and five
administrative cities. According to 2018 data, DKI Jakarta has a number of Education facilities
consisting of 2,476 Elementary Schools; 1,071 Junior High Schools; 489 Senior High Schools; and
320 universities. The number of hospitals in DKI Jakarta is 205 units. The number of poor people in
DKI Jakarta in 2018 was 373,120,000 people. Human Development Index (HDI) in DKI Jakarta at
80.47. DKI Jakarta HDI in 2018 was increased compared to 2017.
West Java Province has an administrative area consisting of 18 Regencies and 9 Cities. West Java
Province has a land area of 35,377.76 km2. The Human Development Index (HDI) in West Java
increased from 2013 to 2018. In 2018, the HDI of West Java Province amounted to 71.3. The poverty
gap index in the Province of West Java in 2017 was 1.32 in urban and rural areas.
Banten Province has an administrative area consisting of 4 Regencies and 4 Cities. The area of
Banten Province is 9,622.92 km2. In 2018, there were 4,562 units of Elementary Schools, 1,421 Junior
High Schools, and 529 Senior High Schools. The percentage of poverty in Banten Province in 2018
was 5.45%. The Human Development Index (HDI) in Banten Province in 2018 was 71.95, an increase
from the previous year which reached 71.42. Banten Province per capita expenditure of 11.99 million
rupiahs per year. In 2018, the length of roads in Banten Province was 549.41 km in good condition,
147.13 km in moderate condition, and 22.3 km in heavily damaged condition.
Figure 1. Area of DKI Jakarta, Banten Province, and West Java Province (Source:
tanahair.indonesia.go.id, 2020)
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IOP Conf. Series: Earth and Environmental Science 592 (2020) 012017 doi:10.1088/1755-1315/592/1/012017
Figure 1 shows the area of DKI Jakarta, Banten Province and West Java Province. Administrative
boundaries of the three provinces include: to the north are the Java Sea; in the east bordering Central
Java Province; the south borders the Indonesian Ocean; and to the west is bordered by the Sunda
Strait.
The following are the results of calculations using the multiple regression method. This calculation
predicts the impact of infrastructure on economic growth (Share of GDP).
Table 5. Table of the results of calculations using the multiple regression method to predicts
the impact of infrastructure on economic growth (Share of GDP).
Stepwise Selection of Terms α to enter = 0.05, α to remove = 0.05
S R-sq R-sq (adj) R-sq (pred)
Model Summary
4.78513 64.70% 60.78% 46.18%
Durbin-Watson Statistic 1.09781
A multiple regression model of the impact of infrastructure on the Share GDP indicator in the area
of DKI Jakarta, Banten Province, and West Java Province is generated. The model shows that the
Durbin Watson value for this analysis is 1.09. The Durbin Watson value indicates that no
autocorrelation was found between the variables used in the regression model. The R-square value
indicates that 64.70% of this regression model can be explained by the indicators used in this study,
and the rest (35.3%) is explained by other indicators. The Confidence level of this analysis is 0.05.
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IOP Conf. Series: Earth and Environmental Science 592 (2020) 012017 doi:10.1088/1755-1315/592/1/012017
Indicators that significantly affect the Share of GDP include the length of roads, the percentage of
piped water, number of hospitals, and the level of service in waste management. Indicators that do not
significantly affect the Share GDP model are Percent of Improved Sanitation, Consumer Electricity
Percentage, Number of Elementary Schools, Number of Junior High Schools, Number of Senior High
Schools, and Number of Universities. Regression models for GDP in DKI Jakarta, Banten Province,
and West Java Province can be seen as follows.
Table 6. Table of the regression models for GDP in DKI Jakarta, Banten Province, and West Java
Province.
Term Coef SE Coef T-Value P-Value VIF
Constant -3.05 2.94 -1.04 0.306
Road 0.000006 0.000002 3.62 0.001 1.36
Percentage leding piped
Coeffiecients -0.2666 0.0883 -3.02 0.005 1.20
water
Number of Hospital 0.2641 0.0724 3.65 0.001 1.35
Waste Management
0.1108 0.0454 2.44 0.020 1.35
LoS
Regression Share GDP = -3.05 + 0.000006 Road - 0.2666 Percentage leding piped water + 0.2641
Equation Number of Hospital + 0.1108 Waste Management LoS
The regression model of the influence of infrastructure on Share GDP produces four indicators
that have a significant effect. Each increase in the indicator length of roads, number of hospitals, and
the level of service in waste management will increase GDP Share from Regency and City of DKI
Jakarta, Banten Province and West Java Province. Each increase in the piped water Percentage
indicator will reduce Share GDP from the DKI Jakarta Regency/City, Banten Province and West Java
Province. The following are the results of calculations using the multiple regression method. This
calculation predicts the impact of infrastructure on economic growth (Human Development Index).
Table 7. Table of the results of calculations using the multiple regression method to predicts
the impact of infrastructure on economic growth (Human Development Index).
Stepwise Selection of Terms α to enter = 0.05, α to remove = 0.05
S R-sq R-sq (adj) R-sq (pred)
Model Summary
2.19141 87.29% 86.26% 84.06%
Durbin-Watson Statistic 1.95027
The regression model of the impacts of infrastructure on the HDI indicator in DKI Jakarta,
Banten Province, and West Java Province shows the Durbin Watson value of 1.95. The Durbin
Watson value indicates that no autocorrelation is found between the variables used in the infrastructure
regression model against HDI. The R square value indicates that 87.29% of this model can be
explained by the indicators used in this study, the rest (12.71%) is explained by other indicators
outside of this model. With the confidence level of 0.05, the significant indicators affecting HDI
include the length of roads, the percentage of improved sanitation, the number of junior high schools.
Indicators that do not significantly influence the HDI model are the percentage of electricity
consumers, the number of hospitals, Level of Service on waste management, Percentage of piped
water, the number of Elementary Schools, Number of Senior High Schools, and Number of
Universities. Regression models of HDI in DKI Jakarta, Banten Province, and West Java Province can
be seen as follows.
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IOP Conf. Series: Earth and Environmental Science 592 (2020) 012017 doi:10.1088/1755-1315/592/1/012017
Table 8. Table of the regression models for HDI in DKI Jakarta, Banten Province, and West Java
Province.
Term Coef SE Coef T-Value P-Value VIF
Constant 62.86 1.11 56.56 0.000
Road 0.000003 0.000001 3.07 0.004 1.94
Coeffiecients
Percentage of Improved
0.0697 0.0150 4.63 0.000 1.38
Sanitation
Junior High School 0.07862 0.00684 11.49 0.000 1.54
Regression Human Development Index = 62.86 + 0.000003 Road + 0.0697 Percentage of Improved
Equation Sanitation + 0.07862 Junior High School
The regression model of the impact of infrastructure on HDI produces three indicators that have a
significant effect. Each increase in the length of the road, the percentage of improved sanitation, and
the number of junior high schools will increase HDI in the regencies/cities of Banten Province and
West Java Province. The most powerful indicator in influencing HDI is the number of junior high
schools of 0.078. The following are the results of calculations using the multiple regression method.
This calculation predicts the impact of infrastructure on economic growth (HCI of Poverty).
Table 9. Table of the results of calculations using the multiple regression method to predicts
the impact of infrastructure on economic growth (HCI of Poverty).
Stepwise Selection of Terms α to enter = 0.05, α to remove = 0.05
S R-sq R-sq (adj) R-sq (pred)
Model Summary
2.20846 50.12% 47.50% 39.32%
Durbin-Watson Statistic 1.81399
The calculation of the regression model of the impact of infrastructure on the Head Count Index
(HCI) of Poverty indicator in the area of DKI Jakarta, Banten Province, and West Java Province shows
that the Durbin Watson value for this analysis is 1.81. The Durbin Watson value indicates that no
autocorrelation is found between the variables used in the infrastructure regression model against the
Head Count Index (HCI) of Poverty. The R-square value indicates that 50.12% of this model can be
explained by the indicators used in this study, and the rest (49.88%) is explained by other indicators
outside of this model. Furthermore, the R-square value (50.12%) also indicates that the model cannot
represent the impact of infrastructure on HCI of poverty.
Based on the results of the three multiple regression analysis in identifying the impact of
infrastructure on economic growth, there are several significant infrastructure indicators on economic
growth indicators, which can be seen in the following table.
Table 10. Significant and not significant infrastructure indicator on economic growth. (Source:
Analysis, 2020)
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IOP Conf. Series: Earth and Environmental Science 592 (2020) 012017 doi:10.1088/1755-1315/592/1/012017
Infrastructure indicators with significant effects on economic growth indicators have positive and
negative impacts. These indicators can be seen in the following table.
Table 11. Positive and negative impact infrastructure indicator on economic growth. (Source:
Analysis, 2020)
Infrastructure indicator
Economic Growth Indicator
Positive impact Negative impact
Share of GDP Length of road Percentage of leding piped water
Number of hospital
Level of Service on waste management
Human Development Index Length of road
(HDI) Percentage of improved sanitation
Number of junior high school
The transportation indicator has always been a significant indicator and has a positive effect on
economic indicators. It proves that the transportation indicator is very influential on the economic
growth. When positive interventions are carried out in the transportation sector, especially road length,
it will increase economic growth in regencies and cities in DKI Jakarta, West Java, and Banten.
However, the length of the road is continuous between regions. Therefore, the coordination between
the Regency and the City Governments in its provision is needed.
5. Conclusion
This study identifies the impacts of infrastructure on economic growth in DKI Jakarta, West Java
Province, and Banten Province. Indicators used in economic growth criteria are Share of Gross
Domestic Product (GDP), Human Development Index (HDI), and Head Count Index (HCI) of
Poverty. Indicators used in infrastructure criteria include transport infrastructure, sanitation, electricity,
clean water, educational facilities, medical facilities, and waste management. Transport infrastructure
is represented by the length of roads, sanitation is represented by the Percentage of improved
sanitation, electricity is represented by the percentage of electricity users, and clean water
infrastructure is represented by the percentage of piped water. Educational facilities are represented by
the number of elementary schools, the number of junior high schools, and the number of senior high
schools. Moreover, medical facilities are represented by the indicator number of hospitals. Waste
Management uses a level of service indicator on the waste management system. All indicators are used
in the attributes of regencies and cities in DKI Jakarta, Banten Province, and West Java Province.
This study uses a multiple regression method. The dependent variable is economic growth, and
the independent variable is the infrastructure indicator. The multiple regression model shows that
several infrastructure indicators significantly influence the economic growth in DKI Jakarta, Banten
Province, and West Java Province. The length of roads, the percentage of piped water, the number of
hospitals, and the level of service in waste management have significant effects on the Share of GDP
indicators. The length of roads, the percentage of improved sanitation, and the number of junior high
schools have significant effects on the Human Development Index (HDI). Furthermore, it is also found
that infrastructure indicators have positive and negative impacts on economic growth indicators.
Infrastructure indicators with positive impacts on Share of GDP are the length of roads, the number of
hospitals, and the level of service on waste management. The infrastructure indicator that negatively
affects the share of GDP is the percentage of piped water. Infrastructure indicators that have a positive
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IOP Conf. Series: Earth and Environmental Science 592 (2020) 012017 doi:10.1088/1755-1315/592/1/012017
impact on HDI include the length of roads, the percentage of improved sanitation, and the number of
junior high schools.
The weakness of this study is that the HCI of the Poverty regression model cannot predict the
impact of the infrastructure indicators. Therefore, further research is suggested to enrich studies on the
effect of infrastructure on poverty levels in several regions. Furthermore, the analysis results of this
study can be recommendations to district, city, and provincial governments as a strategy to increase
regional economic growth by intervening in several regional infrastructure indicators.
6. References
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Acknowledgment
This research was financially supported by Institute for Research and Community Service (LPPM) –
ITB, grant number SAPPK.PN-6-07-2020.
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