Anissa S. Febrina, The Jakarta Post, Jakarta
As cities around the world compete to become economic hubs, Jakarta risks losing access to global supply chains unless it can solve its bottleneck problem, an economist says.
Speaking here Thursday at a seminar on leadership and megacities, Melbourne University economist Howard Dick said Jakarta was Indonesia's main interface with the global economy but it failed to work efficiently.
"Congestion, lack of infrastructure, a burdensome bureaucracy and environmental problems are among the factors causing Jakarta's inefficiency," Dick said.
Being Indonesia's main gateway, Jakarta should provide low-cost, on-time and reliable logistics services, but instead its port and the city are strangling each other, he said.
Leaving these problems untackled could mean increasing unemployment in the capital, as Jakarta drops off the radar of the global supply chain of goods and services, Dick said.
In line with the increasingly borderless global economy, Asian cities are emerging as important points for the flow of people, as well as economic and financial activities.
According to a United Nations' Habitat report, by 2015 some 15 of the world's 23 megacities, or cities with more than 10 million people, will be in Asia.
China's Shanghai, as well as India's Mumbai and Bangalore, are among the new global cities set to replace old economic hubs like London, New York and Tokyo, according to Dick.
With these new city-scale hubs, people have to shift from thinking in terms of nations to realizing that the current global network consists of cities which compete against each other, he said.
Those cities failing to provide a conducive and efficient environment will fall out of the race, a reality Jakarta is already facing as it lags behind neighboring global cities, Dick said.
Unlike Singapore and Hong Kong, Jakarta faces the typical problems associated with sprawl, both physically and economically.
Dick said Jakarta needs to adjust its urban boundaries, matching taxing and borrowing power with expenditure needs, as well as creating accountability in order to provide more effective management.
Furthermore, it needs to work on its infrastructure to allow better movement of people and goods.
Also speaking at the seminar, Shanghai municipal people's congress vice chairman Zhou Muyao said the key component of Shanghai's urban management is prioritizing public transportation.
That effort seems to have paid off, as Shanghai is currently attracting twice as much annual global investment as the whole of India.
A 2006 BBC report said more than 500 multinational companies, ranging from General Motors to Volkswagen, have regional corporate headquarters in Shanghai.
The city, which accounts for about 5 percent of China's national gross domestic product, is growing at a pace exceeding that of the national economy and is expected to grow larger than New York by 2020.
By comparison, Jakarta on average accounts for 17.1 percent of Indonesia's GDP.
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