Abstract
A seaport attracts firms to it; such firms are often complementary and find ways to interact with one another, forming port clusters. The growth and decline of these clusters largely depend on government policies. Large port clusters have more economic activity but are also characterized by negative externalities, such as air pollution. This study investigates the dynamics and sustainability of the Tanjung Priok port cluster. System dynamics are used to examine the issue, and port cluster sustainability is assessed by modeling the dynamics of the system over a 20-year timespan. The growth of a port cluster has been found to positively influence the regional economy and the level of employment while also damaging the environment. This study investigates further the impact of an alternative port cluster development program (namely a free trade policy) and shore power system (SPS) program policies on the sustainability of a port cluster. The model indicates that when a free trade policy and an SPS program are implemented in tandem to maximize the economy and reduce environmental damage, they provide additional benefits.
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