The Effect of Special Economic Zone and International Hub Port Development on the Transportation Infrastructure Provision

Abstract

The Indonesian government has established a Special Economic Zone (SEZ) and International Hub Port (IHP) in Manado, Indonesia. The research aims to understand the effect of both SEZ and IHP and traffic generated by these two developments on the provision of transportation infrastructures. 264 stakeholders were interviewed in this study. The Structural Equation Modeling (SEM) was implemented to answer regressive and dimensional questions. The respondents were first confirmed about their knowledge of SEZ and IHP development before being interviewed. The research variables were divided into 5 namely IHP development, SEZ Development, Logistics Transportation Users, Logistic Traffic Flows and the Provision of Transportation Infrastructures. The Exogenous variables were the IHP development and SEZ development, while the endogenous variable was the Provision of Transportation Infrastructures. The results showed that the Development of the International Hub Ports has the greatest total effect on Logistics Transportation Users, and subsequently on the Traffic Flow of Goods followed by the Provision of Transportation Infrastructures. The Development of Special Economic Zones has a positive effect on the Logistic Traffic Flow and on the Provision of Transportation Infrastructures. Logistics Transportation Users have a direct effect on the Traffic Flow of Goods and on the Provision of Transportation Infrastructures. The Traffic Flow of Goods gives a direct influence on the Provision of Transportation Infrastructures. Logistics Transportation Users are the dominant factors which affect the Transportation Infrastructure Provision. Then, Logistics Transportation Users are influenced by the development of IHP. This research demonstrates that there is a reciprocal relationship between both SEZ and IHP and the provision of transportation infrastructures. Thus, this study recommends that the North Sulawesi transportation infrastructure plan should be aligned with the needs of the SEZ and IHP, which ensures both international and national connectivity. The results of this study can be used to recommend appropriate policies regarding infrastructure provision.