4. Dumai Melakka Economic Corridor
The fourth corridor between Melaka in Malaysia and Dumai in Indonesia constitutes another principal link between Sumatera and Peninsular Malaysia. In terms of the corridors, it serves as another link between the Straits of Melaka Economic Corridor and the Banda Aceh-Medan-Dumai-Palembang Economic Corridor.
while infrastructure connectivity is only one of several factors that affect trade
flows, it is likely that low levels of intra-IMT trade flows can be partially attributed to deficient
connectivity, and high transactions costs in the subregion. A previous study on international
integration in Asia, illustrates that countries that are poor in transport infrastructure performed
poorly in trade, paid substantially high transactions costs, and are naturally failing to reap the
full benefits on the globalization process (De, 2005). In figure 2, among the three IMT-GT
member countries, Indonesia has had the highest transactions cost, the lowest transport
infrastructure index, and the poorest port performance. To the extent a chain is only as strong as
its weakest link, this makes it evident that improvement of transport infrastructure facilities in
Indonesia will need to have relatively higher priority for IMT-GT economic corridor
develop
4. Dumai Melakka Economic CorridorThe fourth corridor between Melaka in Malaysia and Dumai in Indonesia constitutes another principal link between Sumatera and Peninsular Malaysia. In terms of the corridors, it serves as another link between the Straits of Melaka Economic Corridor and the Banda Aceh-Medan-Dumai-Palembang Economic Corridor.while infrastructure connectivity is only one of several factors that affect tradeflows, it is likely that low levels of intra-IMT trade flows can be partially attributed to deficientconnectivity, and high transactions costs in the subregion. A previous study on internationalintegration in Asia, illustrates that countries that are poor in transport infrastructure performedpoorly in trade, paid substantially high transactions costs, and are naturally failing to reap thefull benefits on the globalization process (De, 2005). In figure 2, among the three IMT-GTmember countries, Indonesia has had the highest transactions cost, the lowest transportinfrastructure index, and the poorest port performance. To the extent a chain is only as strong asits weakest link, this makes it evident that improvement of transport infrastructure facilities inIndonesia will need to have relatively higher priority for IMT-GT economic corridordevelop
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