TASK:

What forces shape the vitality and structure of producer services and/or creative industries
and/or tourism in your global city region (1500 words, 30%)?
a) outline the major forces that shape the development of global city regions;
b) illustrate how one or more of the forces are felt in any (you may discuss one or two or all) of
the three economic sectors (i.e., producer services, creative industries, and tourism) in your
GCR.
With regard to the development of your global city region, the essay could include one or more
areas in economic specialization, infrastructure improvement, and institutional integration. You
are encouraged to use maps to illustrate spatial changes in your GCR.

Glossaries

In Indonesia, there are two types of administrative terminology used for city, they are
Kotamadya and Kabupaten. This paper uses city to replace Kotamadya and Regency to replace
Kabupaten.
Services and Urban Tourism in Jakarta City Region
This essay will discuss the major factors of the Jakarta City Region (JCR) development
in the context of city regions. This essay firstly claims that JCR experiences economic
restructuring regarding two different sectors. The first economic specialization rests on the
services sector in the core city while the second sector is manufacturing which mostly located in
peri-urban area. This essay also argues that the tourism industry is also a growing economic
sector in Jakarta City Region beyond the national boundary.
The first section of this essay will explore the economic restructuring of Jakarta City
Region. Analysis regarding the economic specialization of JCR and its spatial distribution will be
presented. Secondly, this essay will analyze the development of urban tourism in JCR, focusing
on MICE and shopping tourism. Then short conclusion will close the essay.
Introduction
This preliminary discussion aims to introduce the reader with the economic profile of
Jakarta City Region. The table 1 shows the development of GDP for each municipality in this
city region. DKI Jakarta, as the core of this city region, predominated the GDP income in the
three recent years (figure 1) which indicates that this core is still economically dominant within
this city region.
Figure 1. GDP Distribution in Jakarta City Region (%)

5%
DKI Jakarta

Bekasi City1%

4% 2%

Bekasi Regency

Depok City

Tangerang
77%City

Tangerang Regency

1%
7%
3%
Bogor City

Bogor Regency

Source: BPS DKI Jakarta (2014), BPS Kota Bekasi (2014), BPS
Kabupaten Bekasi (2013), BPS Kabupaten Tangerang (2013), BPS
Kota Tangerang (2013), BPS Kota Bogor (2013), BPS Kabupaten
Bogor (2013), BPS Kota Depok (2013)
Economic Restructuring of Jakarta City Region
JCR has experienced economic restructuring from manufacturing to services sector that
predominantly occurred in the core area of this city region. In 1993, for example, manufacturing
was the dominant sector in DKI Jakarta contributing 25.85% of the total GDRP, while finance
and business service sector was only 17.61%. In 2008, the rate of the manufacturing sector
decreased to 16.44% while the service and business sector increased to 29.41% (BPS 1993,
2008, in World Bank, 2012). In addition, Salim (2013) also demonstrates that the concentration
of services and business sector in the JCR is extremely dominant in the core area (DKI Jakarta)
shown by the service employment density map and trade density map below.
Service and trade employment density map of JCR in 2000

Source: Salim, 2013

An example of the concentration of services sector of JCR will be exemplified by the
data of financial sector. Sassen (2001) mentions that finance plays an important role in
supporting other economic activities in the city by providing loans for other businesses, thus, the
existence of this sector is very significant for global cities as a producer service. Furthermore, in
terms of spatial distribution, central offices of producer services usually concentrate in the
center of the city region (Han et al, 2009).
Two forms of service producer in the financial sector which are banking and insurance
will be presented as follows. The first table shows the location of foreign bank offices, foreign
bank representative offices, and mix bank offices that entirely located in DKI Jakarta the core

area of this city region. According to Firman (1998), the growth of this sector emerged in
October 1988 after the national government permitted the operation of foreign banking sector in
Indonesia. Several foreign banks only place their representative offices without fully operate.
Some other banks are categorized as mix banks because their share were partially held by the
local companies even though they are originally from outside Indonesia. Furthermore, the
second table presents the list of insurance firm central offices that located in the core area of
JCR.
This fact supports the discussion that central offices of producer services in JCR are
concentrating within the core area. Besides that, in the context of global city, the presence of
these foreign firms also demonstrates that this core area of JCR is also connected with the
global economic system. This condition is in line with the main characteristic of global city in
which finance and business services is one of the drivers of the urban economics (Hutton,
2004).
Table .Foreign Banks in Jakarta City Region, 2013

Name
Foreign Bank Representative offices
JAPAN BANK FOR INTERNATIONAL
COOPERATION
SUMITOMO MITSUI TRUST BANK. LTD
THE EXIM BANK OF REF.OF CHINA
UNITED OVERSEAS BANK (UOB)
ICICI BANK
BANK OF INDIA
WESTPAC BANKING CORPORATION
THE BANK OF NEW YORK MELLON
WELLS FARGO BANK, N.A.
ING BANK NV
NATIXIS
LANDESBANK BADEN-WURTTEMBERG
DRESDNER BANK AG
COMMERZBANK AG.
EFG BANK
UNITED BANK OF SWITZERLAND AG SWISS
Foreign Banks
BANK OF AMERICA, N.A
BANK OF CHINA LIMITED
CITIBANK N.A.
DEUTSCHE BANK AG.
JP. MORGAN CHASE BANK, N.A.
STANDARD CHARTERED BANK
THE BANGKOK BANK COMP. LTD
THE BANK OF TOKYO MITSUBISHI UFJ LTD
THE HONGKONG & SHANGHAI BANKING
CORP
THE ROYAL BANK OF SCOTLAND N.V.
Mix Bank
BANK COMMONWEALTH
BANK AGRIS
BANK ANZ INDONESIA
BANK BNP PARIBAS INDONESIA
BANK CAPITAL INDONESIA
BANK DBS INDONESIA
BANK KEB INDONESIA
BANK MAYBANK SYARIAH INDONESIA
BANK MIZUHO INDONESIA
BANK RABOBANK INTERNATIONAL
INDONESIA
BANK RESONA PERDANIA
BANK WINDU KENTJANA INTERNATIONAL
BANK WOORI INDONESIA
BANK CHINATRUST INDONESIA
BANK SUMITOMO MITSUI INDONESIA

Country of Origin

Central Office
Location

Japan

DKI Jakarta

Japan
Taiwan
Singapore
India
India
Australia
US
US
Netherland
France
Germany
Germany
Germany
Switzerland
Switzerland

DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta

US
China
US
Germany
US
UK
Thailand
Japan
UK

DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta

UK

DKI Jakarta

Australia
Germany (Commerzbank), UK
(Barclay Bank), US (Chemical Bank)
Australia and NZ
Australia
France (LCL) and Malaysia
(Maybank)
Singapore
Korea
Malaysia
Japan
Netherland

DKI Jakarta
DKI Jakarta

Japan (Resona Bank), Hong Kong

(Bank of East Asia)
Korea
Taiwan
Japan

DKI Jakarta

DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta

DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta

Source: Bank Indonesia (2015a; 2015b)

Table . Large and Foreign Insurance Firms in Indonesia, 2014
Name of Insurance Firm
ACA Asuransi
AIA

Central Office Location

DKI Jakarta
DKI Jakarta

Chartis
AXA
Winthertur
Harta
Sinar Mas
Assist-Card GSA Indnesia
PT. Asuransi Grasia Unisarana
PT. Zurich Insurance Indonesia
PT. Asuransi Allianz Utama Indonesia
PT. ACE Ina Insurance
PT. Asuransi Umum Mega Insurance
PT. China Taiping Insurance Indonesia
PT. Lippo Insurance Tbk.
PT Assurance Adira Dinamika
Asuransi MAG

DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta
DKI Jakarta

Source VSF, 2014

While the economic restructuring occurred in the core area of JCR, on the other hand,
manufacturing became more intense in the peri-urban area of this city region. This condition is
illustrated by Hutton (2004) who argue that the decline of manufacturing sector in the core of
global city region will take place and the manufacturers will move to the peri-urban area of the
city region. Firman (1998) also argues that one characteristic of the global city in Asia is the
spatial division of labor in which the function in core area is different with the function of the
periphery area of the city region.

Spatial Distribution of Industry and Industrial Estates in JCR, 2011-2012

Source: JICA, 2012

The economic restructuring of JCR impacts the physical structure of this city region.
Since the inner city became highly significant and condusive for services and business activity,
the land price within this area extremely increased (Han.). This condition is one factor that
pushes the outward development of this city region.

The following section will discuss the property development of JCR. It focuses on the
large residential development and new town development in JCR. According to Winarso
(2010), the development of large residential area in JCR spread out to the second-tier cities of

JCR. The map below shows the spatial distribution of new residential areas in JCR. It is
observed that the trend of this new development is around the western area of JCR, comprising
Tangerang City and Tangerang Regency.

Those new residential development, to some degree, has created urban sprawl in JCR.
The three maps below present the development of built-environment in JCR from 1995, 2000,
and 2005 respectively.
Source: IPB (2010)
Urban Tourism in JCR

The most dominant tourism sub-sector in Global City Region is urban tourism such as
shopping centre and mall (Han et al, 2015). This section will discuss the spatial distribution of
shopping centres and malls in JCR area.

Number of international flights

Year
Departure
2008
3587077
2009
3738056
2010
4794934
2011
4794934
2012
5720583
Source: BPS DKI Jakarta (2013)

International
Arrival
3457124
3514678
4782401
4782401
5803900

Transit
138247
82706
549117
549117
23227

Winarso (2010)

Winarso (2010)

Important reference:
Winarso (2010)
Firman (2010)
Winarso et al (2002) Residential land development in Jabodetabek, Indonesia: trigerring
economic crisis
Winarso et al (2015) Peri-urban transformation in the Jakarta metropolitan area
http://www.rap-japan.net/english/research_pdf/Indonesia/Indonesia_PropertyMarketOutlookSingaporeApr2013.pdf
http://www.colliers.com/-/media/files/marketresearch/apac/indonesia/jkt-1q2015-r1.pdf
http://www.bi.go.id/id/publikasi/laporan-keuangan/alamat-bank/umum/Default.aspx
http://www.bi.go.id/id/publikasi/laporan-keuangan/alamat-bank/asing/Default.aspx
Hutton, TA 2004, Service Industries, Globalization, And Urban Restructuring Within The AsiaPacific: New Development Trajectories And Planning Responses, Progress in Planning, Vol 61,
pp. 1-73.
http://www.vfsglobal.com/spain/indonesia/images/list_of_insurance_companies_1204.pdf