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Implementing Indonesia’s Economic Master Plan (MP3EI): Challenges, Limitations and Corridor Specific Differences

Market structure, conduct performance analysis. Marketing channels for different products in agriculture and animal husbandry. State intervention and parastatals in agricultural marketing. Pricing of agricultural inputs and products. Buffer stocking and import policies for agricultural produce. Value addition and its impact on prices of agricultural commodities. Systems approach to agricultural marketing. Marketing costs, margins and market efficiency. Market integration-horizontal and vertical, spatial and temporal. Price integration between domestic and international markets. Forward trading, speculation and hedging. Application of quantitative techniques in marketing. Markov chain analysis, decision theory, transportation model, network analysis. Demand for and supply of farm products. Cobweb model. Demand- supply models- Estimation of elasticities. Demand supply projections | Implementing Indonesia s Economic Master Plan MP3EI Challenges Limitations and Corridor Specific Differences June 2012 Prepared by Strategic Asia Page 1 of 87 Table of Contents The Concept of an Economic Corridor.12 Economic Corridors in Indonesia.12 Implementation Phases of the MP3EI.15 Barriers to Implementing the MP3EI.16 Public Communication and Awareness.17 Synergy with the RPJP and the RPJM.19 Regulatory Reform.21 Institutional Reform.23 Infrastructure.25 Regional Disparities.29 Human Resource Development.33 Financing and Attracting Private Sector Investment.35 Environmental Sustainability.38 Differing Perceived Opportunities and Barriers to Implementing the MP3EI at the National Level and in the Kalimantan and Bali- Nusa Tenggara Corridors.43 Implementation Requirements and Recommendations for the MP3EI.47 International Experience of Implementing Economic Corridors.47 A Closer Look on East-West Economic Corridor of Greater Mekong Sub-region GMS Turning Infrastructure Corridors into Economic Corridors.47 The Indonesia-Malaysia-Thailand Growth Triangle.51 Roles of Stakeholders in the Implementation of the MP3EI.54 Current Structure of the KP3EI.55 Level of Preparedness.57 Sequencing.57 Recommendations for the Implementation of the MP3EI at the National Level.59 Implementation Recommendations in the Kalimantan Corridor.60 Implementation Recommendations for the Bali- Nusa Tenggara Corridor.61 Conclusions.62 REFERENCES.64 ANNEX.67 Page 2 of 87 Figures Figure 1 - MP3EI Economic Corridor Map.11 Figure 2 - Estimated Investment Required for the Main Economic Activities of the MP3EI .14 Figure 3 - Implementation Phases of MP3EI.15 Figure 4 - Barriers to Implementing MP3EI.16 Figure 5 - Infrastructure Projects Under Construction.28 Figure 6 - Total Projects and Total Investments in the MP3EI.29 Figure 7 - Regional Inequality in Indonesia.30 Figure 8 - Indications of Investment in 6 Economic Corridors.32 Figure 9 - Factors for Doing Business in Indonesia.36 Figure 10 -