The Effect of Infrastructure (Transport) to The Economic Growth

Translated from : http://lubmazresearch.wordpress.com with Googletranslate

The development of infrastructure to economic development has a close relationship and interdependence with each other. repair and improvement of infrastructure in general will be able to increase the mobility of people, the creation of drop shipping the goods, the presence of the transport of goods with higher speeds, and improved quality of services such transportation.

At this crucial infrastructure problems to be addressed on the agenda of local government, because the infrastructure is a major determinant of the sustainability of development activities, such as to achieve economic development targets both qualitatively and quantitatively. In the short-term infrastructure development will create jobs in the construction sector medium and long term will support increased efficiency and productivity related economic sectors. So that infrastructure development can be considered as a strategy to encourage economic growth, poverty reduction, improved quality of life, increased mobility of goods and services, and can reduce the cost of domestic and foreign investors (Marsuki, 2007).
The relationship of infrastructure to economic growth is directly infrastructure provides benefits to households (household) and also much enjoyed by the company which led to economic growth and ultimately provide welfare Prud'homme (in Briceno et al, 2004).

The linkage between the infrastructure (transport sector) with partumbuhan economic context of government spending (Government spending) transport sector in accordance with the Theory Keyles (in Gardner Ackley, 1961) states that the activities of government seeping into all areas of assuming a closed economy, where Y is economic growth, C is consumption, G is the volume of government spending, and I is investment. 

Systematically have the identity as follows: Research on the effects of public investment in infrastructure (in this case the transport and communications) on the growth made by Easterly and Rebelo in 1993. Using assessment as a helper variable to avoid linking the two endogenous variables and the possibility of reciprocal causal relationships. With the pool method of regression, found that public investment in infrastructure has always been a positive relationship with relatively high coefficients of between 0.59 to 0.66 on the growth.
In encouraging the development of infrastructure, the government as a major player in the infrastructure sector should maintain the sustainability of development investments in infrastructure and prioritize infrastructure development plans, so the infrastructure can be improved both in quantity and quality. Infrastructure development should involve the private sector and communities to achieve sustainable development. There must be a right combination between large and small scale infrastructure to achieve the target income distribution and poverty reduction. For that we need a more integrated approach in infrastructure development from planning to service to the community, to ensure synergy across sectors, regions and territories. In more detail the provision of infrastructure to economic development are: (Basri, 2002).
1. Accelerate and provide the necessary goods.
2. Availability of infrastructure will enable the availability of goods for more people with a cheaper cost.
3. A good infrastructure can facilitate the transport which in turn stimulates the stabilization and reduce the price disparity among regions.
4. Infrastructure that facilitate the transport services led to the production areas can be transported and sold into the market. 

Effect of the digital revolution in consumer behavior and marketing

Digital revolution is a massive change in the use of digital tools. Digital revolution is meant here is the use of advanced technology in marketing.

Effect of digital revolution has caused a drastic change to the business environment, this can be seen as follows:

1. Consumers have more power than ever before.

2. Consumers have access to more information than ever before.

3. The marketers can offer more products and services than ever before.

4. The exchange between marketers and consumers will be more interactive and spontaneous.

5. Marketers can gather more information about consumers to quickly and easily.

Consumer Behavior:

Is the behavior of consumers, where they can illustrate the quest to buy, use, evaluate and improve their products and services. Focus of consumer behavior is how individuals make decisions to use the resources they have available to consume a product.

Two types of consumer

1. Personal Consumer: The consumer buys or uses goods or services for their own use.

2. Organizational Consumer: The consumer buys or uses goods or services to meet the needs and running the organization.

Production Concept

Consumers are generally more interested in products that are cheaper. Absolute is known that the object of marketing is cheap, efficient production and distribution-intensive.

Product Concept

Consumers will use or purchase products offered are high quality, best performance and feature-complete feature.

Selling concept

Marketers have the overriding goal of selling a product which unilaterally decided to produce.

Marketing Concept

The company wants consumers to know through research that has been done before, and then produce products that consumers want. This concept is called the marketing concept.

Market segmentation

Dividing the group of heterogeneous market into homogeneous groups of market.

Market targeting

Selecting one or more segments that identify the company to determine.

Positioning

Develop a different idea for goods and services that exist in the minds of consumers.

Providing customer value is defined as the ratio between the benefits perceived resources (economic, functional and psychological) are used to generate these benefits. Gains have been felt in the form of a relative and subjective.

Customer satisfaction is the individual's perception of the performance of the product or service in relation to expectations.

Maintaining customers is how to maintain that consumers remain loyal to one firm compared to other companies, almost in all business situations, more expensive to find new customers than retain existing ones.

Source : organisasi.org

Inflation

In simple inflation is defined as the increase in general prices and continuously. The increase in the price of one or two items alone can not be called except when rising inflation was widespread (or the resulting price increase) on other goods. The opposite of inflation is called deflation.

Indicators are often used to measure the rate of inflation is the Consumer Price Index (CPI). Changes in the CPI from time to time showing the price movement of a package of goods and services consumed by society. Since July 2008, the package of goods and services in the CPI basket has been done on the basis of Cost of Living Survey (SBH) in 2007 conducted by the Central Statistics Agency (BPS). Then, the BPS will monitor the price development of goods and services on a monthly basis in several cities, in traditional and modern markets for some types of goods / services in each city.

Other inflation indicators based on international best practice include:

Wholesale Price Index (WPI). Wholesale Price of a commodity is the price of the transaction between the seller / merchant the first major with a buyer / trader next big market in large numbers at the first of a commodity. [More detailed explanation about the WPI can be viewed at the web site www.bps.go.id Statistics]

Gross Domestic Product Deflator (GDP) price level measurements describe goods (final goods) and services produced within an economy (country). GDP deflator is produced by dividing nominal GDP at current prices by GDP at constant prices.

Grouping Inflation

Inflation as measured by the CPI in Indonesia is grouped into 7 groups of expenditures (based on the Classification of individual consumption by purpose - COICOP), namely:

1.       Food Group

2.       Food Groups So, Beverage, and Tobacco

3.       Housing Group

4.       Clothing

5.       Group Health

6.       Group Education and Sports

7.       Transport and Communications Group.

Source: Bank Indonesia

Theory of (the) Second Best in the ASEAN-India Free Trade Area (AIFTA)

Economic integration is a response from the Theory of (the) Second Best from Canadian economist who coined by economist Richard Lipsey and Kelvin Lancaster Australia-America in 1956. This theory states that ideally the world economy is free trade where there is free competition and there are no barriers to trade (trade barriers). Economic integration into the second best choice (second best option) because in practice in this world is very difficult to eliminate trade barriers.

This theory assumes that in the current economic market failure in certain sectors, which caused low levels of efficiency in the sector and while in other sectors may have reached an efficient level, it is expected the economy would be better to merge the two markets different and will eliminate another level of inefficiency of the other market. Merger process is known as economic integration.

The concept of competitiveness as a comparative advantage introduced by the theory of comparative advantage by David Ricardo in 1817 through his book On the Principles of Political Economy and Taxation, known as the Ricardian model. However, comparative advantage was first expressed by Robert Torrens in 1815 in an essay published in the Corn Laws.

Measurement of the competitiveness of the most popular use is Revealed Comparative Advantage (RCA), which measures the comparative advantage. Balassa (1965) uses to measure a country's comparative advantage dengaan compile an index known as the Balassa Index. This index identifies whether a country has a comparative advantage that can be shown but not to determine the origin of its comparative advantage. This definition has undergone revision and modification so that the use of RCA as a measurement of comparative advantage vary as at the global level, sub-global/regional or bilateral between two countries as trading partners.

A study by the Fiscal Policy Board concluded that given the similarities in products which have export competitiveness, the trade policy related to exports and imports such as import duties and export taxes can affect competitiveness. Second, for items that are included in a group of products where a country's export and import, there are two possible impacts of trade AIFTA creation or trade diversion. This impact is dependent on changes in relative prices of products exported or imported by any scheme of tariff reduction or elimination AIFTA. On the product in the group that does have a very high competitiveness, then to maintain or improve competitiveness, then that can be done is product differentiation. Third, in each of the ten export products of Indonesia, India and ASEAN, with the highest competitiveness in the period 2000-2009, not seen consistency in the position of the competitiveness of products that do not show the export product specialization. And lastly, the comparison between India's exports to Indonesia with ASEAN showed differences in export market in India and ASEAN, while India's exports to ASEAN and ASEAN in addition to Indonesia is relatively the same. Indirectly, this export market differences indicate differences in access to productive resources and technology between Indonesia and the ASEAN as a whole.

Based on the above conclusion, we recommend:
1. Policies related to import duties need to consider their impact on the level of competitiveness of export products.
2. With the factors that influence and determine the level of competitiveness of export products, the trade policy on products that already have competitiveness should focus on efforts to maintain or improve competitiveness through product differentiation.
3. With the factors that influence and determine the level of competitiveness of export products, the trade policy on products that do not have competitiveness should focus on product differentiation. Within the framework AIFTA, then the scheme reduction and elimination of import duties aimed at trade strategy creation.