Indonesia wants firms relocating from China. Why are so few coming?

[Indos]

Is Jakarta the business hub of Indonesia?

Correct bro

Business District

 

[Mista]

Islands country like Indonesia is nightmare for logistics

I think it's a plus as long as they can build enough ports. They have direct access to the sea and trade with the rest of the world without expensive logistics.

Most islands are not inhabited anyway. The majority of the population is concentrated in Java Island and Sumatra Island.

 

[Rayadipa]

Is Jakarta the business hub of Indonesia?

Yup Jakarta GDP alone already reach $200 billion with $19k GDP per capita.

 

[kankan326]

I think it's a plus as long as they can build enough ports. They have direct access to the sea and trade with the rest of the world without expensive logistics.

Most islands are not inhabited anyway. The majority of the population is concentrated in Java Island and Sumatra Island.

Water transport has its shortcoming. Too slow. Especial for short distance and human transport. Unless Indonesia locates all industries and most population in one island. But which means unbalanced development and land and resources waste.

 

[Brainsucker]

Water transport has its shortcoming. Too slow. Especial for short distance and human transport. Unless Indonesia locates all industries and most population in one island. But which means unbalanced development and land and resources waste.

Not necessarily true. Water Transport has it's perk compared to land base transport via train / container truck. As they can bring more cargo than any land base transport can do. The challenge lies to the availability of port and the cargo ships themselves.

 

[kankan326]

Not necessarily true. Water Transport has it's perk compared to land base transport via train / container truck. As they can bring more cargo than any land base transport can do. The challenge lies to the availability of port and the cargo ships themselves.

UK and France built undersea tunnel for good reasons.

 

[Mista]

Water transport has its shortcoming. Too slow. Especial for short distance and human transport. Unless Indonesia locates all industries and most population in one island. But which means unbalanced development and land and resources waste.

It's slower but much more cost-efficient.

Land transport of goods is nowhere near energy-efficient as water transport. And in the first place you have to spend billions to build roads and railways to connect markets. Even so, you connect only domestic markets which are small for developing countries. What about the depreciation and maintenance of infrastructure every year?

OTOH you can think the sea as a free natural highway infrastructure with direct access to further markets such the US, China, EU, ASEAN etc.

It's much cheaper to transport goods from Indonesia to Vietnam than from Sichuan to Beijing for example.

 

[kankan326]

It's slower but much more cost-efficient.

Land transport of goods is nowhere near energy-efficient as water transport. And in the first place you have to spend billions to build roads and railways to connect markets. Even so, you connect only domestic markets which are small for developing countries. What about the depreciation and maintenance of infrastructure every year?

OTOH you can think the sea as a free natural highway infrastructure with direct access to further markets such the US, China, EU, ASEAN etc.

It's much cheaper to transport goods from Indonesia to Vietnam than from Sichuan to Beijing for example.

If you are investor, you have to consider both money cost and time cost. Time cost in most cases is more important than money cost.

 

[powastick]

I have a few stories on labor issues and corruption in Indonesia. Indonesia is still certainly still corrupt but i rather not elaborate.

 

[Viva_Viet]

The concentration of Indonesian industry is in West Java, particularly in Jakarta satellites cities where the minimum wage is much higher than Batang region. One of the reason they still invest there is better infrastructure and better skill labors. Many Jakartan can apply to work there as well since the location is not too far from Jakarta and I believe many Jakartan become supervisors there.

When I was still fresh graduates I actually got called to work in LG office and factory in Tangerang, West Java. I can attend the test and come back to Jakarta at the same day, no problemo. So the closeness to Jakarta is one of the reason. My cousin who previously live in Jakarta also work in Toyota Indonesia Manufacturing in cost control division, he entered cost control division right after graduating from university in Depok, West Java.

Samsung R&D office in Jakarta, Indonesia

https://research.samsung.com/srin

What I mean here is that, we agree ID has better infrastructure than VN, no need to say it again and again.

If Investors leave CN and still dont come to ID, then its your own problems, maybe the investors dont think they can export their products in low tariff from ID to US cos Trump's threatened to tariff anyone, and ID also dont have FTA wt EU

Just plz dont drag VN in your own problems .tks

 

[Mista]

If you are investor, you have to consider both money cost and time cost. Time cost in most cases is more important money cost.

Not really, if you have studied and understand shipping. Cost is much more important for non-perishable goods.

For example, many cargoes ship around the Cape of Good Hope rather than through the Suez Canal when oil prices are low even though the Suez Canal reduces shipping time by 15 days. Because fees at the Suez Canal are too expensive and it's cheaper to sail around Africa to save cost.

It doesn't really matter to a retailer when their goods are delivered at a later date. The goods are non-perishable and you just have to order shipments at an earlier date.

At a time when Egypt has just raised $8 billion to expand the Suez Canal project, reports are surfacing that global cargoes are increasingly bypassing the canal due to low oil prices, as shippers prefer to take a longer route that is cheaper.

Numerous cargo ships are now opting to take the longer route south of Africa, bypassing both the Suez Canal and the Panama Canal. All told, since last October, 115 vessels running goods from Asia to North Europe and the U.S. east coast have sailed around South Africa instead of going through the Suez Canal, according to a report by Danish SeaIntel Maritime Analysis.

The report notes that while carriers could continue to reroute some Asia-Europe cargoes, they may keep the Suez Canal route for some services in cases where shippers require a faster transit time.Related: The U.S. Still Dominates World Oil Prices

It’s all about fuel. Falling fuel prices mean that vessels can afford to take a route south of Africa that would normally take up to a week longer, depending on the origins. Now they can foot the bill to burn the extra fuel it takes to go faster, closing the time gap and making the Suez Canal—which charges a lot more for passage--less attractive.

Vessels sailing from Asia to the East Coast via the Suez Canal have to pay on average US$465,000 for passage, according to SeaIntel, which calculated that the South Africa route would save an average of US$235,000 per voyage. It also noted that some services could save as much as US$19 million a year at the high, and as much as US$7.3 million per year in the worst-case scenario.

https://oilprice.com/Energy/Energy-...un-Suez-Canal-In-Search-of-Cheaper-Route.html

LONDON/LOS ANGELES/MADRID: The US$1 trillion container shipping industry is in a slowdown. Literally.

Some shipping lines, whose retail customers are being hammered by the coronavirus pandemic, are reducing sailing speeds and taking longer routes around Africa, avoiding Suez canal passage fees, according to the companies and ship-tracking specialists.

https://www.channelnewsasia.com/new...hrinks-as-pandemic-pummels-retailers-12807502

CAIRO--The Suez Canal has been hit by a double blow. After absorbing the shock of stagnating global trade due to the COVID-19 pandemic, it was hit by the steepest drop in oil prices in 18 years. Consequently, the canal is no longer as competitive as a corridor for global trade.

Three global shipping lines have already announced plans to reduce their operating costs by rerouting some of their cargo ships to take the route around the Cape of Good Hope. The concerned ships belong to the 2M alliance, which includes the Maersk Line of Containers, the MSC Line and the CMMA-CGM Line.

https://thearabweekly.com/suez-canal-suffers-double-blow-pandemic-collapse-oil-prices

Moreover land-based transports of goods are very limited in market accesibility.

You're from China, and you should know very well why the coastal provinces are richer than inland provinces.

Even for the US, most of the prosperous cities are along or near the coast.

 

[Indos]

Yup, Indonesia was really corrupt in the old days and it is difficult for good Muslim to reach its potential here. My father for instant refuse to be a CEO of Japanese-Indonesian construction company since he know he must do many bribery to win contract here as CEO. My older brother who had an idea to make a business in telecommunication sector and has made a legal company come back to become a worker after one of the big client ask him a money and a girl to win a contract. He just traumatized to see that reality and abandon that plan completely.

Nevertheless I am still optimistic about Indonesia future as people are getting more pious religiously here. Gov official also get much better in treating us and dont ask money anymore, at least it is what I have seen. Anti corruption campaign also get better and people in Indonesia hate corrupt attitude. Corruption should be erased in both gov and private sector level.

 

[Indos]

Maybe, but it has the mighty Comodo Dragon.

True bro,

Dont forget we also have King Cobra as well

 

[ohmrlobalobayeh]

The article said it:

Analysts say red tape, labour unrest, unproductive workers, lack of infrastructure and systemic corruption are among the obstacles Indonesia must overcome to make itself more attractive to such companies.

Indonesian workers r unproductive. Lazy and demanding

Absolutely correct

 

[Brainsucker]

UK and France built undersea tunnel for good reasons.

Yeah, you can drive between UK and France with your car via that tunnel.