The idea for this research began one morning in 2007 when I was reading an offer for a PhD scholarship in a local newspaper. I immediately informed my father, Dr Wendy Aritenang, the then General Secretary of the Indonesian Transportation Ministry. After an extensive discussion, later that night he encouraged me to study the impact of both decentralization and ASEAN FTA on Indonesian regions as a topic for my PhD research. Despite his civil engineering background, he has a wide and in-depth expertise on decentralization and free trade agreements as a result of more than thirty years of experience in the government. Consequently, the PhD thesis and this book benefit much from short and distance discussions with him in London, Jakarta, Batam, Bandung and Singapore. The thesis and this book are definitely an intellectual production of a father and a son.

This book derives from my PhD thesis at the University College London, United Kingdom. In writing the thesis, I would like to express my sincere and deep gratitude to my supervisor Dr Jung Won Sonn. I appreciate all his knowledgeable contribution, support and critiques at every stage of the writing. His guidance extensively helped me in understanding my thesis and integrate each part to form the thesis. I also owe my gratitude to my thesis co-supervisor Professor Nick Phelps whose ideas and knowledge helped deepen my research. I am fortunate to have Professor Andres Rodriguez-Pose of the London School of Economics and Political Science (LSE) as my thesis external examiner. As a leading scholar in the research topic, his expertise and advice greatly helped with the intellectual amendments. I would also like to express my gratitude to Dr Nikos Karadimitriou as the internal examiner who gave invaluable suggestions for the improvement of the thesis.

I would like to thank the Ministry of Communication and Informatics, Republic of Indonesia for their support in the form of a scholarship for funding this research. Additionally I would also like to thank the Agency for Assessment and Application of Technology (BPPT) that has supported me to pursue this doctorate degree. The intellectual development of the PhD thesis is also a result of formal and informal discussions with friends at UCL Bartlett School of Planning, UCL Enterprise Society 2009, Indonesian Student Society in the United Kingdom and colleagues at the Indonesian Embassy.

This study investigates the effects of the decentralization and AFTA on regional convergence between 1993 and 2005, by applying quantitative statistical analysis and historical institutionalism to explore the effects. This chapter summarizes the research findings and analysis results by discussing the current impact of state restructuring on persistent regional disparities and the growing economic convergence, the politico-economy complications of the AFTA beyond trade liberalization per se, and how local governments and actors develop various opportunities and development trajectories depending on their institutional history. The chapter ends by providing some suggestions on policy implications and limitations.

CURRENT IMPACT OF STATE RESTRUCTURING

This research on the effect of state restructuring on Indonesian regional development focuses on two events: decentralization and AFTA implementation. From the study, we can draw several research conclusions. First, despite evidence of convergence process, persistent and severe regional disparities continued throughout the state-restructuring period. The statistical analysis showed that regional disparities fluctuated and peaked during the financial crisis between 1998 and 2001, while the geographical analysis demonstrated significant regional disparities between Java and non-Java districts. Outside of natural resource industries, the western part of Indonesia reported higher economic levels and growth than the central and eastern regions. The sectoral analysis accordingly revealed that manufacturing industries were concentrated and agglomerated in the western part of Indonesia. Additionally, the case study on high-technology manufacturing industries showed a high index of spatial concentration in Java and Sumatra districts. Consequently, these areas have higher economic levels and growth than other regions.

Second, the econometric analysis revealed evidence of regional economic convergence over the observation period, and indicating regional endowments and capacities that determine variations in development. The state restructuring of decentralization and AFTA have different effects on regional economic development. The economic analysis showed that decentralization was associated with lower regional economic growth, whilst AFTA impact was insignificant. This finding was found both in the OLS and panel data analysis. The study also revealed that the control variables — the road accessibility and labour productivity — corresponded proportionally with higher economic growth. A higher share of manufacturing industries on GRDP is associated with economic growth, implying that this sector contribute significantly on local development.

In the last two decades, international theory and econometric analysis have linked regional disparities with decentralization and trade liberalization policies. This can be measured via local economic welfare mobility following trade liberalization (Quah 1993), local endowments (Martin and Sunley 1998) and local economic convergence rates (Barro and Sala-I-Martin 1991).

Furthermore, empirical studies have resulted in varied perspectives over the impact of these state restructuring. The regional disparity studies in Indonesia during the New Order period were mainly studied at the provincial levels (Akita and Lukman 1995; Garcia and Soelistianingsih 1998), while there are emerging studies on the regional disparities at the district level for the post-decentralization period (McCulloch and Syahrir 2008; McCulloch and Malesky 2011; Aritenang 2012).

The analysis of industry types (Fan and Scott 2003), industry concentration (Sjöberg and Sjöholm 2004), main economic sectors and the existing political order (Shankar and Shah 2003) have all affected the level of disparities between and within countries and the trade liberalization policy regime in particular (Petrakos, Rodríguez-Pose and Rovolis 2005). There are also a growing number of studies on the local impact of state restructuring, such as the impact of trade liberation on regions with borders (Logan 2008; Rodríguez-Pose and Sanchez-Reaza 2005) and the local infrastructure (Rivas 2007). These studies confirmed Heng's (2012) argument that the most significant impact of the globalized economy was at the local level, rather than national or provincial level. This study examined the impact of decentralization and the ASEAN Free Trade Agreement (AFTA) on districts in Indonesia.

This chapter is organized as follows: the first section is a short description of data and spatial unit of analysis and followed by a section on exploratory analysis of economic growth in terms of time series and geography between 1993 and 2010. The next section examines spatial distribution of economic growth and manufacturing industries. The final section discusses the research findings from this chapter.

RESEARCH DATA DESCRIPTION

This chapter uses the BPS publication of regional list in 1997 based on the number of districts before the decentralization. In the 1997 regional list there are 26 provinces and 292 districts with 4,088 overall observations for the period between 1993 and 2010.

INTRODUCTION

The late 1980s witnessed efforts to establish a single economic space across Singapore, Johor in Malaysia, and Batam, Bintan, Karium as well as other islands in the Riau Archipelago in Indonesia. As a regional expression of new forms of economic cooperation arrangements — a departure from traditional textbook models of free trade areas, custom unions, common markets, and economic unions — the Singapore-Johor-Riau Growth Triangle (henceforth, SIJORI) was, at that time, promoted by the Singapore government as “the concept of borderless economic zones with coherent and integrated divisions of labour that transcend formal national political boundaries” (quoted in Rodan 1993, p. 223).

To be sure, growth triangles represent a very particular genre of market creation. The usage of such cross-border regionalism as an embodiment of both borderless free trade and of city-region development is particularly evident in East and Southeast Asia. The Chinese Economic Area which links Southern China (Guangdong and Fujian provinces), Hong Kong and Taiwan — generally known as the South China Growth Triangle — provides one of the earliest examples, but its status as a formal cross-border region became blurred with Hong Kong and Macau's subsequent incorporation as Special Administrative Regions of China (Breitung 2002; Yamazawa 2013). The Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT) and the Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA) constitute other platforms in Southeast Asia but these are arguably less commercially operational. Instead, SIJORI was held as the most widely cited example of an ideal “borderless” regional market space.

However, there is a vast body of literature that has argued that the deterritorialized character of our global age does not imply that we are living in the sort of borderless world suggested by the likes of Ohmae (1995) and Mahbubani (2013) or envisaged by free trade enthusiasts. Overstating the statist approach has also resulted in a mystification of the role of the state in the formation and reproduction of capitalist social relations in market institutions (Chang 2013). In effect, the borderless rhetoric of the complementarity conjoining Singapore capital with Johor and Riau not only legitimizes the political support for the Growth Triangle, it also obscures and understates the conditions and mechanisms in not only reproducing the model, but also the consequences resulting from its reproduction.

INTRODUCTION

The relationship between the pirate and the border is an old one. On one hand, the pirate has often been depicted as an anarcho-nihilist in Western literature, from Captain Johnson, a.k.a. Daniel Defoë (Johnson 2010), to Gilles Lapouge (2004). According to the literature, pirates flee from the law and states while ignoring borders and rules. However, archaeologist Jean-Pierre Moreau demystified seventeenth–eighteenth century piracy when he described the pirate community as one governed by strict hierarchy, discipline on board and social welfare for injured pirates (Moreau 2006). In Southeast Asia, based on the testimony of the Chinese customs inspector Zhao Rugua or Chou Ju-kua (1170–1228), seamen who attacked nearby ships sailing from or to rival entrepôts were deemed to be “pirates”. But from the seasmen's viewpoint, they were only “collecting taxes” from the boats sailing off the coast of the Sriwijaya thalassocracy, centred on the city of Palembang in South Sumatra (Coedes 1989). They may have been considered privateers as they operated in the name of a ruler. Just like the pirates in the Caribbean Sea in the sixteenth–eighteenth centuries, they were in touch with a political authority, especially in the nineteenth century when the pirates were linked to the Riau-Lingga sultanate and fought against both the British as well as American powers (Lombard 1979).

Today, in a post-Cold War era, pirates are also a symbol of the dark side of globalization. Deemed to be non-state actors, Article 101 of the United Nations Convention on the Law of the Sea (UNCLOS) (United Nations 1982) defines piracy as disassociated from political entities. According to UNCLOS, piracy consists of “any illegal acts of violence or detention, or any act of depredation, committed for private ends by the crew or the passengers of a private ship or a private aircraft, and directed … on the high seas …”. However, in 2013, about 79 per cent of piracy incidents in Southeast Asia occurred against berthed or anchored ships in territorial waters (ICC-CCS 2013). For this reason, an International Maritime Organization (IMO) circular completes the UNCLOS definition by adding “armed robbery against ships” (taking place in territorial waters) to the “piracy” strict sensu.

INTRODUCTION

Launched in 1989 and originally encompassing Singapore, the Malaysian state of Johor and the Indonesian island of Batam, the SIJORI Growth Triangle sought to market the three territories as a “single investment destination” offering different cost structures yet closely linked by proximity, free trade zones, and a significant degree of political capital (Smith 1996; Sparke et al. 2004). Singapore, possessing significant financial, technological and managerial capital, yet facing rising land and labour costs, was the “core” of the region, while Johor and Batam occupied the land, labour and resource-intensive spaces (Thambipillai 1998).

The economic logic, enabled by investment liberalization — particularly in Batam — and infrastructure investments in both non-core regions led to major flows of investment during the 1990s (Smith 1997; Hutchinson 2012). Of note was the electronics industry which, buoyed by high levels of Japanese investment, expanded significantly during this period.

However, over time, the Growth Triangle lost momentum as the governments of both Malaysia and Indonesia included more and more territories under this initiative, thus diluting its economic rationale (Phelps 2004). In addition, diplomatic relations between all three nations went into flux in the late 1990s, as relations between Singapore and Malaysia cooled and Indonesia, for its part, underwent far-reaching political changes following the end of the New Order (Ooi K.G. 2009; Crouch 2010). Since then, investment authorities in all three territories have continued to promote the advantages of proximity and cost differentials, albeit in a less concerted fashion.

As far as the Electrical and Electronics (E&E) industry is concerned, the territorial division of labour (core-periphery) between SIJORI's component parts established itself during the initial period. This was reconfirmed in research carried out during the 1990s and early 2000s (Grundy-Warr, Peachey and Perry 1999; Lee T.Y. 1991; Ooi G.L. 1995; Smith 1997; Sparke et al. 2004; Toh and Low 1993; Yaw, McGovern and Budhwar 2000; Yeoh et al. 1992, 2004a, 2004b, 2004c; van Grunsven, Wong and Won 1995).

In tandem with the Growth Triangle's visibility, research on the E&E industry connecting the three regions has since dwindled. What research there is, focusses largely on Singapore and its policy frameworks.

The maps presented in this volume are based on the (digital) map data collection “Architecture of Territory: Singapore Metropolitan Region” which was assembled by ETH Zürich Assistant Professorship of Architecture and Territorial Planning, Milica Topalovic with Hans Hortig and Karoline Kostka at the Future Cities Laboratory in Singapore during 2011–15.

This map collection was created in order to visualize and thus help imagine, discuss and research the urban characteristics and urbanization process of the trinational metropolitan region centred in Singapore. It is the result of an extensive collection of map information originating from different sources, including existing planning documents provided by local authorities in three countries, commercially available map data as well as open source maps.

The most significant are:

1. • TomTom Navigation GIS (Geographic Information System) Data of Johor State

2. — Malaysia, Commercial geo-referenced information, data purchased in 2012.

3. • Open Street Map (OSM), Open source geo-referenced information, data retrieved in the period of 2011–15.

4. • Singapore Master and Concept Planning Documents (2008–2014) Urban Redevelopment Authority (URA) Ministry of National Development (MND), for proposed land use.

5. • Spatial Plan of Batam, Bintan, Karimun Free Trade Zones, Rencana Tata Ruang Kawasan Free Trade Zones Batam, Bintan, Karimun (RTRW FTZ BBK) Indonesia Free Zone Authority (BIFZA) 2009.

6. • Batam, Bintan and Karimun Spatial Development Plan 2004–2014, Rencana Tata Ruang Batam, Bintan dan Karimun (RTRW BBK 2004–2014), 2008 and 2011.

7. • Batam Spacial Development Plan, Peta Rencana Pola Ruang Kabupaten Batam (RTRW Batam), Bappeda Bata, 2008.

8. • Bintan Spacial Development Plan, Peta Rencana Pola Ruang Kabupaten Bintan (RTRW Bintan), Bappeda Kabupaten Bintan, 2007.

Extensive mapping during design research studios and fieldwork by students of ETH Zürich and members of the Assistant Professorship of Architecture and Territorial Planning, led to additional qualitative case studies and area maps. Results of this mapping process are referred to as “Architecture of Territory, self-mapping”.

The maps in each section are based on the aforementioned mapping process, and were respectively adapted by data from the following sources.

INTRODUCTION

Regional cross-border economic cooperation to boost economic growth is not new to Southeast Asia. Since the late 1980s, policymakers in Singapore, Johor, and the Riau Islands have attempted, at different times, to leverage their different attributes in a coordinated fashion. The close proximity of Singapore with the Malaysian state of Johor to the north, and the Riau Islands in Indonesia to the south captured the imagination of politicians and economic decision-makers, prompting initiatives to “knit” the three territories into a “growth triangle” to catalyse development in the region. Despite its compelling business argument, the concept has had intermittent levels of support, depending on the internal dynamics of the three countries.

The idea of the growth triangle was initially put forward by then Deputy Prime Minister Goh Chok Tong in 1989 and was subsequently endorsed by the leaders of Singapore, Malaysia, and Indonesia in 1990. Since then, there have been several moves to increase cooperation. Thus, an agreement for economic cooperation between Singapore and Indonesia on the joint development of the whole of Riau province was signed on 28 August 1990. A joint Indonesia-Singapore investmentpromotion mission to Tokyo and Osaka to promote the economic heartland of the Riau Islands, Batam, was also undertaken in December 1990. However, interest in the growth triangle waned somewhat in the wake of the Asian Financial Crisis. And despite the desire to intensify cooperation and deepen the linkages between the three territories, as expressed by political leaders of the three countries, little of substance was achieved.

This indifferent progress has often been attributed to domestic politics and other national priorities. Furthermore, there has also been an element of unfortunate timing, as the three countries concerned have rarely promoted SIJORI at the same time. While Singapore has consistently sought to promote cross-border linkages as a means of escaping its land- and labour-scarce economy, political and economic priorities in the neighbouring countries have been more varied.

In the late 1990s, the Indonesians were quite keen in promoting the BBK islands (Batam, Bintan and Karimun) in Riau as a catalyst to revive the economy following the Asian Financial Crisis. Thus, the national government went as far as to have BBK designated as a special economic zone. However, that idea did not receive equivocal support in the House of Representatives.

INTRODUCTION

The previous chapters and maps in this book have explored the interactions between the territories of the SIJORI Cross-Border Region along a number of axes. The first section set out the contours of SIJORI in economic, demographic, and territorial terms, and sought to understand the CBR as more than just the sum of its parts. The second section explored the political interactions within and between the territories as they relate to the “project” of deeper cross-border ties. Following that, the third section looked at how the region's historical, cultural, and familial linkages mediate the borders as well as how interactions between the territories have given rise to different social and cultural phenomena. The fourth section looked at the formal and informal economies that have arisen — some consciously and others spontaneously — out of the interactions between the three territories.

The guiding themes for these chapters have been the two empirical questions set out in the introduction, namely: how have the three territories evolved as a result of the deeper interaction between them; and, what are they likely to look like in the future? In addition, the chapters have also collectively sought to shed light on the theoretical utility of the Cross-Border Region framework.

This concluding chapter will revisit each of the four sections of the book to paint a broad picture of what has happened within and between these territories, as well as draw out the implications for future developments. It will then bring the discussion back to the Cross-Border Region framework to evaluate what we have learned from applying it, and how it can be extended in light of the findings. From there, this chapter will suggest future areas of research before concluding.

UNDERSTANDING THE WHOLE

Using the three key dates of 1990, 2010–12, and 2030, the two chapters and associated maps in Section One explored the demographic, economic, and territorial interaction between Singapore, Johor, and the Province of the Riau Islands (PRI).

In 1990, SIJORI had a combined population of 5.7 million people, with 3 million in Singapore, 2.1 million in Johor, and 560,000 in PRI. In addition to having the biggest population, the city-state also represented the bulk of the CBR's wealth, accounting for 85 per cent of its combined GDP, with Johor and PRI contributing 11.6 and 3.2 per cent of the total, respectively.

INTRODUCTION

This chapter looks at Singaporean working-class men who travel to the Indonesian island of Batam for cheap sex, food and shopping. It presents Batam as a space particular to the metropolis-hinterland relationship that Singapore shares with the Riau islands. Such a space is conceived as an “imaginary frontier” where the hinterland is imagined by the metropolis as a peripheral site that accommodates its desires and is, consequently, malleable to the economic, emotional and sexual needs of men who go there to find what they cannot obtain in the metropolis. Like all frontiers, Batam also sees an asymmetrical power relationship between the visitors and inhabitants of this space, thus allowing for the romanticization and eroticization of the Indonesian island. The chapter attempts to tease out distinctions between Batam and other domestic red-light districts to uncover the socio-cultural contours of the men who visit the Indonesian island. It proceeds to examine activities such as friendships and gift-giving from male clients to Indonesian sex workers, together with the treating of the latter with food and drinks, as meaningful actions that suggest the need to rethink the trans-border nature of masculinity. It is argued that the diminished economic status of Singapore working-class men compels them to “defer” their masculinity from the metropolis to the Riau island hinterlands, and that sexual consumption must thus be analysed as but one of an array of meaningmaking activities performed by working-class Singaporean men as they perform their masculinity.

THE METROPOLITAN SPILLOVER EFFECT

The emergence of so-called “growth triangles” from the late 1980s is a fertile space to examine the global dimension of masculinity. Global forces like imperialism, labour migration, neo-colonialism and globalization have connected and animated a multiplicity of local gender orders (Connell 2005), while constructs of masculinity in global institutions “are rapidly becoming the dominant global hegemonic model of masculinity, against which all local, regional, and national masculinities are played out and to which they increasingly refer” (Kimmel 2005, p. 415; see also Cashmore and Parker 2003; Kubrin 2005). Scholars have argued that the globalization of masculinity should not lead to the intellectual fossilizing of global masculinities. For example, the notion of a global masculinity is almost invariably a Western construct without due consideration to the cultural hybridization processes that go into the formations of such global masculinities (Kam 2003).

INTRODUCTION

The acronym “SIJORI” refers to an economic zone made up of parts of three nationstates. Singapore, Johor (a state in Malaysia, which comprises the southernmost part of the Malay Peninsula), and Riau (since 2004 comprising two provinces in Indonesia — namely, Kepulauan Riau, and Riau, which previously constituted one province).

From a historical perspective, these three parts of what are now separate nationstates previously belonged to the Johor-Riau kingdom. There is thus discontinuity between geographical territory (in terms of geographical coordinates of latitude and longitude) and political territory (in terms of nation-state sovereignty). This discontinuity is significant because SIJORI as an economic zone has been established, not in a tabula rasa, but in a historically constituted territory that refers to a bygone Johor-Riau kingdom and that is currently divided into three nation-states. This chapter first discusses the geographical territory referred to as Riau in the political context of the Johor-Riau kingdom, followed by a consideration of the implications of the past for the present.

The name “Riau” is currently used for two provinces in Indonesia — Propinsi Riau and Propinsi Kepulauan Riau. Propinsi Riau, generally referred to as Riau, shares borders with four other provinces — Sumatera Utara to the north, Jambi to the south, Sumatera Barat to the west, and Kepulauan Riau to the east. Propinsi Riau also shares part of the Straits of Malacca with Malaysia. In contrast, Propinsi Kepulauan Riau — or Province of the Riau Islands (PRI) — is a widely dispersed archipelago located in the South China Sea, with Vietnam and Cambodia to the north, Singapore and the Malay Peninsula of Malaysia to the west, as well as Sabah and Sarawak of Malaysia to the east. It abuts only two other Indonesian provinces — Sumatera Selatan to the south and Propinsi Riau to the west.

This chapter focuses on PRI for the following reasons. From a historical perspective, the territory of the Province of the Riau Islands was part of the Johor- Riau kingdom prior to 1824. This may be seen in Figure 9.1. From a contemporary perspective, when the “Growth Triangle” was first put forward in December 1989 by Singapore's then First Deputy Prime Minister, Goh Chok Tong, and endorsed in June 1990 by Indonesia's then President, Soeharto, and Malaysia's then Prime Minister, Mahathir, it originally included only Johor, Singapore and Batam.