extfieldsofstudy: Business Physics

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Analysis of government development financing between Sukuk and Bonds

This study aims to examine the performance of government development financing sukuk/SBSN compared with bonds/SUN period 2014-2017. The method used is descriptive quantitative with secondary data. The data obtained were analyzed and concluded based on a predetermined framework. The results of the analysis based on the method of efficiency ratio, Data Envelopment Analysis (DEA) and Value at Risk (VaR) shown that SUN has high efficiency and high risk, while SBSN has low efficiency and low risk. Based on the analysis of the Efficient Portfolio Frontier shown that an efficient portfolio exists at risk level to 0.14% and profit rate up to 369.31% exist in the proportion of 60% SBSN financing and 40% SUN financing proportion, it means that the Sukuk financing portfolio was better rather than Bonds financing portfolio.

Introduction
The slow development of infrastructure is one of the factors hampering a country's economy. The government has recently focused on the role of infrastructure in increasing economic activity. Various programs have been designed to build infrastructure in the past 10 years [1]. The quality of Indonesia's infrastructure shown in the 2017-2018 Global Competitiveness Index (GCI) report places Indonesia's global infrastructure competitiveness index ranked 52 out of 137 countries [2] Referring to the publication of the World Development Report [2] the availability and quality of adequate infrastructure has a higher potential to accelerate economic growth. The more variety of problems and development programs in Indonesia has the consequence of an increasingly greater budget burden on the State Budget [3]. On the other hand, the government always faces the problem of a relatively increasing budget deficit as shown in table 1:  1, the value of the budget deficit is relatively rising, the total government debt continues to increase every year. The total of central government debt in November 2018 was recorded at IDR4,395.9 Trillion, this figure rose to IDR 467.3 Trillion compared to the same period in 2017. The APBN data for December 2018 showed the debt from loans amounting to IDR 784. 3 Trillion and debt in the form of Government Securities (SBN) amounting to IDR 3,611.5 trillion, where the issuance of SBN in rupiah denominations and foreign currency denominations each reached IDR 2,612.6 trillion and IDR 998.9 trillion [4]. The table 2is the total growth of Net govenrment Securities in 2013-2017:  Table 2. shows the total growth of net Government Securities that has continued to increase. The biggest growth occurred from 2014 to 2015 with a percentage increase of 36%. But on the other hand, if linked to table 1 regarding the value of the APBN deficit, the total net SBN financing in 2013-2017 is far greater than the realization of the budget deficit. Meanwhile according to Bussing Burks in [5] if the financing is far greater than the deficit, then this has the potential to incur temporary idle funds for the issuance of SBN, the government bears the burden of debt interest. This is contrary to the objectives of government debt management mentioned by the International Monetary Fund namely "... at the lowest possible cost over the medium to long run, consistent with a prudent degree of risk".
Meanwhile, the issuance of Government Securities as a source of budget financing aims to realize the ideals of independence in financing development and exploiting the potential of Indonesia's large population. Aside from being conventional, since 2008 the offering of State Sharia Securities or State Sukuk is expected to attract investors who consider sharia aspects of the issuance of SBN.
As a predominantly Muslim country, the basis for the emergence of sukuk according to [5] is due to a mismatch of bonds which are defined as debt instruments and provide coupons in the form of interest from the principal of the bonds prohibited in Islamic law as stated in the word of Allah SWT QS. Al Baqarah: 275.
Although in terms of objectives, the sukuk function is the same as bonds, namely the increase in capital needed by both corporate and government entities. Sukuk differs from bonds because bonds are defined as long-term debt instruments issued by companies or governments [7]. [8] also suggested that sukuk as one of the sharia effects has different characteristics from bonds. Sukuk are not debt securities, but proof of ownership of assets on which the underlying assets are issued. Claims of ownership of sukuk are based on specific assets/projects. The use of sukuk funds must be used for halal business activities. Rewards for sukuk holders can be in the form of rewards, profit sharing, or margins, according to the type of contract used in the issuance of sukuk.
While the results of the issuance of the state-based sukuk project development (Project Finance Sukuk) from 2013 to 2017 continue to experience an increase. The following details the number of issuance of State Sharia Securities (SBSN) in 2013-2017 shown in figure 1: Based on figure 1, the Sukuk experienced rapid growth, although according to [9] the portion compared to the conventional market was still relatively small. But this is certainly a concern for the government that sukuk plays an important role in accelerating development, especially infrastructure. Nevertheless, this also indicates the occurrence of beneficial symptoms between the two parties (investors and publishers), where the government as the publisher benefits from the use of funds from the public, while the community as an investor gains profits or returns on investments made.
In general, sukuk offers the same alternatives as bonds so that they can be used as a comparison for investors in determining investment while supporting development. However, an increase in the issuance of Government Securities (SBN) that is far greater than the budget deficit each year has the potential to lead to long-term financing risk where it can make fiscal space more narrow [10]. Although so far the state budget deficit and total government debt are still below the limits as mandated by Article 12 paragraph 3 of Law Number 17 the Year 2003 concerning State Finance which states that the budget deficit is limited to a maximum of 3 percent and a maximum debt of 60 percent of Gross Domestic Product (GDP). But according to [11] the occurrence of fiscal risks that are not anticipated well will burden the budget and affect future economic growth targets.
Based on the problems described above by looking at the comparison of the total issuance of Government Securities/Surat Berharga Negara (SBN) with financing needs or budget deficits, as well as potential financing and fiscal risks in the long run, the researcher is interested in analyzing the performance comparison of the issuance of sukuk and bonds for the 2014-2017 period as government development financing instruments as measured by the level of efficiency, level of risk, and efficient portfolio. Based on these descriptions, the researchers chose the title: "Analysis of Government Development Financing between Sukuk and Bonds". Year 2008, SBSN is Government securities issued based on sharia principles, as proof of the investment in SBSN Assets, both in rupiah and foreign currencies. What distinguishes sukuk and bonds is return. Sukuk Returns received by sukuk holders come from Profit Sharing is based on mudaraba or musharaka and Margin/fee based on murabahah, istisna, or ijarah agreements. This type of sukuk will provide a fixed return. Here are some basic differences between sukuk and bonds [12]

Types of SBSN Structure
The types of state sukuk structure according to the [12] include: 1. Ijarah Sale and Lease Back; Sukuk with Ijarah-Sale and Lease Back structure is the sale and purchase of an asset which then the buyer rents out the asset to the seller. The contract used is the bai 'contract (sale and purchase) and the ijarah (lease) contract, which is carried out separately. The sale of assets to an asset is basically just the sale of a beneficial title without physical transfer and transfer of ownership (legal title). This type of structure is used in IFR, SR, Sukuk Valas and SPN-S series sukuk. 2. Ijarah Al-Khadamat; Ijarah Al-Khadamat is a sukuk issued with the aim of providing a certain service and obtaining a fee for the provision of said service so that the sukuk holder becomes the owner of the service and is entitled to a fee for providing the service. 3. Ijarah -Asset to be Leased; A state sukuk with an Ijarah structure -Asset to be Leased has been issued since 2012 with the aim of optimizing the potential of underlying assets in the form of government projects that have been allocated in the APBN. This type of structure is used in the PBS series sukuk issuance.  [15]. Furthermore, this study uses the Efficient Portfolio Frontier method [16] to obtain the most efficient financing portfolio after calculating the level of efficiency and risk between Government Sukuk and Government Bonds. The software used to help with data analysis is Microsoft Excel.

Efficiency Rate
Efficiency Ratio Analysis Efficiency. Analysis of the issuance of Government Sukuk and Government Bonds is measured using the ratio between output and input. It is said to be efficient if it is able to produce certain outputs with the lowest possible input or with certain inputs capable of producing maximum output. The efficiency ratio can be calculated with the help of Microsoft Excel software through the following equation [13]: In addition, researchers also used the Data Envelopment Analysis (DEA) model to measure the comparison of the efficiency levels of Sukuk and Bond issuance.

3.2.2.
Data Envelopment Analysis (DEA) Method. The measurement of the level of efficiency of Sukuk and Bond issuance also uses the Data Envelopment Analysis (DEA) model [14] The stages in measuring the value of efficiency in the DEA method are as follows [14] A DMU or a financing instrument is said to be efficient or not if the efficiency level in each DMU ranges from 0 to 1. A DMU has the best ability if the relative efficiency value is 1,0000 or 100%, while other DMUs whose values are below 100% are said its ability is still below the DMU which has been efficient (inefficient).

Value at Risk (VaR) Method
The method used to measure the level of risk arising from the issuance of Government Sukuk and Government Bonds is Value at Risk (VaR) with the help of Microsoft Excel Software. VaR shows how much an organization can suffer losses or be faced with uncertainty within a certain timeframe [17]. The first step is to obtain monthly net price data for the state sukuk and government bonds for the period January 2014 -September 2017 compiled from the Indonesia Bond Pricing Agency (IBPA) through the website www.ibpa.co.id. The next steps to measure Value at Risk [15] are: 1. According to [18] Sukuk and Bond return can be calculated using the equation: = log return on day i Ṝ = average return in the sample period n = number of returns in the sample.
4. Determine a certain Confidence Level (1 ~ α). In this study, the Confidence Level used was 95%. The 95% confidence value gives a 1.65 confidence factor. 5. Determine the holding period. In this study a monthly holding period was used with data on the issuance of Sukuk and Bonds for the period January 2014 -September 2017, so the value of the holding period was 45. 6. Calculating VaR values according to [14] can use the equation: Therefore, a method is needed to determine the most efficient financing portfolio after the results of the analysis "High Profit Level and High Risk Level" or "Low Profit Level and Low Risk Level". The method of determining an efficient financing portfolio uses the Efficient Portfolio Frontier method [16].

Frontier Efficient Portfolio Method
The determination of an efficient financing portfolio between Government Sukuk and Government Bonds uses the Efficient Portfolio Frontier method [16].
In the efficient frontier portfolio method, the formation of an efficient portfolio is carried out by determining the financing weights (proportions) of each Sukuk and Bond included in the portfolio. In this study, researchers used weights ranging from 0%, 10%, 20%, and so on up to 100% using the help of Microsoft Excel software programs, with the target of minimizing the function of risk for a certain level of efficiency. Then the level of efficiency and risk portfolio are calculated.

3.4.1.
Determine the Level of Profit (Efficiency) Portfolios. The level of profit (efficiency) of the portfolio can be calculated by adding up the efficiency levels of each Sukuk and Bonds based on their weight (proportion of financing) as in the following equation [16]:

Determine Portfolio Risk (VaR).
Portfolio risk levels can be calculated using data on the proportion (weight) of Sukuk and Bond portfolio financing, data on the level of risk (VaR) of Sukuk and Bonds, and the degree of efficiency correlation between sukuk and bonds as shown in the following equation [16]: Information : ρij = Correlation Coefficient between Sukuk and Bonds X = Bond Profit (Efficiency) Y = Sukuk profit rate (efficiency) n = Number of Financing Periods After obtaining risk level data for each change in the efficiency interval, then plotted in the riskefficiency graph in accordance with their respective weights so that an efficient frontier graph is  [19] which results in one of the most efficient portfolio points with a risk value that is the lowest and a certain value (efficiency).
Meanwhile, researchers conducted a process of reading and synthesizing in depth to further conduct quantitative descriptive analysis in comparing other requirements in the issuance of Sukuk and Bonds.  The smallest issuance value of the entire SUN series was recorded in the ORI series from IDR 23.6 Trillion in 2016 to IDR 8.9 Trillion in 2017. The number of issuance of retail type bonds decreased consecutively in the last three years illustrates the situation that individual investor interest in investing with ORI products is weakening. This is inversely proportional to the purpose of ORI issuance as an effort to expand the base of domestic investors who generally only save their funds in investment instruments in the form of savings or deposits which are money market instruments. So that the presence of ORI should be an alternative investment land that is no less promising like other existing investment instruments such as stocks, mutual funds, and deposits. In general, the total SUN issuance in 2014-2017 has significantly increased since 2014 amounting to IDR 351.7 Trillion until the end of 2017 amounting to IDR 527.9 Trillion.

Development of SBSN and SUN Issuance
Furthermore, the prolonged monetary crisis in Indonesia in 1998 was triggered by a decline in the value of regional and domestic currencies. Therefore, the government policy to reduce the issuance of foreign debt began to be promoted since 1999 through a strategy of issuing domestic debt. SBN has now become the main source in meeting funding targets in the APBN (Anggaran Pendapatan dan Belanja Negara) because they have a significant influence. In order to meet these targets, the government as much as possible continues to explore the potential sources of financing from within the country, namely by issuing Rupiah-denominated SBN on the domestic market. However, with various considerations such as limited absorption capacity of domestic securities and the need to fulfill benchmarks for Indonesian securities denominated in USD, the government issued Government Securities in foreign currencies on the international market.
To see the development of the issuance of Foreign Currency SBN, the following is presented data on outstanding Foreign Currency Government Securities (SBN) in 2014-2017 in table 6 : that is open to currency volatility should make the government have good and reliable risk management instruments to protect the value of government debt, given the volatility of the currency has a significant influence on the increase in the value of loans and nearly half of government debt in foreign currency denominations. Central Government Financial Report (LKPP) notes that Foreign Currency SBN is dominated by SUN. There are 22 series of foreign currency SUN with 18 series having USD denominations (including domestic SUN denominated in foreign currencies), 1 series denominated in Euro and 3 series with denominations of JP ¥. While there are only 4 series of USD-denominated foreign currency SBSN. This indicates that the SBSN scheme is able to control the government to issue foreign currency denominated securities because they must be based on clear underlying assets before issuance.
Data on the development and issuance of outstanding SBSN and SUN from 2014 to 2017 above generally illustrates that SBSN in Indonesia is growing rapidly or increasing significantly each year. However, the contribution of SBSN to development financing is still low. This is evidenced by the data portion of SBSN issuance in Indonesia is still relatively very small when compared to the portion of bond issuance.

4.2.1.
Based on Efficiency Ratio. The level of efficiency between SBSN and SUN issuance can be seen from how much the ratio obtained from the calculation between each output (revenue) generated by the input (expenditure) issued. The following table presents the results of the calculation of the SBSN and SUN efficiency ratio from 2014-2017. Based on table 7, (data processing Appendix) illustrates the level of efficiency of SBSN and SUN from 2014 to 2017 tends to fluctuate. The average percentage rate of return on SBSN issuances reached 285.21% while SUN reached 495.45%. Quantitatively, the results of the calculation of the efficiency ratio above conclude that SUN is more efficient than SBSN. However, if analyzed further based on data on the development of SBSN issuance, the type of PBS dominates nearly half of the total issuance of SBSN. While the characteristics of the PBS series SBSN type are different from other types of SBSN instruments or SUN instruments themselves. The SBSN PBS objectives have been determined based on infrastructure projects that have been planned to be used as underlying assets and may not be used for other things. This is the major value of PBS SBSN compared to other types of SBSN or SUN because the use of the financing is clearly for projects that are of sustainable productive nature such as in the case of using toll road project financing, bridges, railways, irrigation channels, etc. It means will be a positive impact on the national economy as a whole in the long run. This is what then makes the outline of the SBSN issuance efficiency up to 2017 look very lacking because the SBSN financing scheme pays close attention to long-term efficiency and a clear issuance basis for future risk management of financing can also be controlled.

4.2.2.
Based on the Data Envelopment Analysis (DEA) Method. Level of efficiency between SBSN and SUN based on the results of DEA-CRS processing shown in the following table: Based on table 8, above, the results obtained in the Input-Oriented CRS Efficiency column where the DMU SUN produces a value of 1 which means that the issuance of SUN for the 2014-2017 period has the best or relatively efficient ability, while the DMU SBSN produces a value of 0.91017 which means that SBSN is relatively inefficient or its ability is still below the already efficient DMU SBSN.
Meanwhile, the Return to Scale (RTS) of the DMU SUN shows the position of Constant which means that if an additional 1% of SUN input will result in an increase in output in the same proportion.
Whereas the SBSN DMU RTS shows the position of Decreasing which means that if a 1% increase in the input will increase output smaller than 1%. This means that the SBSN DMU has not been able to use its inputs appropriately or in other words the use of inputs is not proportional to the amount of output produced.
Quantitatively based on the DEA method, it concluded that during the issuance period of 2014 to 2017, SUN had the best performance and was stated to be more efficient than SBSN. However, the efficiency values of the two instruments did not show a significant difference. Over the past four years, the issuance of SBSN has been dominated by PBS types, where these PBS types are sustainable productive projects so that their efficiency values cannot be seen directly. That is why spending to finance infrastructure is not directly proportional to income. Some infrastructure projects that have been completed have not produced quick income in a short time. Unlike the case with SUN whose issuance results are directly used and utilized in terms of covering the general budget deficit such as state spending.  Table 9, shows the results where with a 95% confidence level, the chance of a loss in the issuance of SBSN is 0.15% with a maximum possible loss of IDR 210.7 billion to the average total issuance of IDR 140.4 Trillion each year. Whereas in the issuance of SUN the probability of loss is 0.16% with a maximum possible loss of IDR 774.4 billion to the total average of IDR 465.3 trillion annually. This indicates that the quantitative risk value of SUN is greater than the risk of SBSN. If analyzed further, the risk of SBSN is indeed lower or can be called relatively safe compared to the SUN.

Risk Level of SBSN and SUN based on the Value at Risk (VaR) Method
First, the floating exchange rate system (following market prices) has its own impact on each issuance of government securities, especially those denominated in foreign exchange (forex). Indicators of debt portfolio exchange rate risk are shown by the ratio of foreign currency debt to total debt. Until the end of 2017, the value of foreign currency SBN oustanding reached IDR 907 Trillion against the total outstanding SBN of IDR 1,194 Trillion. Aside from the residual effects of the issuance of foreign currency SBN, exchange rate risk is also caused by the impact of the depreciation of the Rupiah against foreign currencies. SBSN can minimize exchange rate risk because it returns to the sukuk system which requires an underlying asset with a profit sharing scheme where the risk will be borne jointly.
Second, interest rate risk does not become a benchmark in SBSN as prevailing in SUN which requires the payment of interest as a return for investors. In addition to fixed rate SUN, the risk of rising interest rates will have more impact on variable rate floating bonds, which will cause an outstanding debt portfolio to increase and an increase in the nominal outstanding portfolio with interest rates. The variable rate will increase portfolio sensitivity to changes in the benchmark interest rate, and vice versa.

Efficient Financing Portfolios
The results of the calculation of the SBSN and SUN efficient financing portfolio are shown in the following table:  14 Based on table 10, above it can be seen that SBSN financing has a low level of profit (efficiency) of 285.21% and a low risk level of 0.15%. Then followed by SUN financing which has a high level of profit (efficiency) of 495.45% and a high level of risk of 0.16%. This is common because, behind a high risk, there is the potential for a balanced reward in accordance with the prevailing investment principle of "high risk high return, low risk low return". Therefore, Indonesia as a state institution certainly needs to take a closer look at the decision making in issuing SBN or other financing instruments.
In allocating debt through SUN or Bond financing instruments, the government cannot ascertain whether the debt is allocated to productive projects whose profit potential can be higher than the cost of debt because the debt obtained in the end cannot be traced with certainty. This is because every time there is a fund that is obtained, it will go into the public cash account of the State and be mixed with funds from other sources such as tax collection, non-tax state revenue, receipt of grants or even sourced from external loans country. The funds of the SUN or Bond instrument to be difficult to track their use. So, it can be used to finance various types of shopping. The effectiveness of indeterminate debt can be minimized by the SBSN financing instrument because the Sukuk system requires that its designation is clear for what it is and must be in accordance with sharia compliance, as well as its issuance basis.
Therefore, to determine the most efficient financing portfolio between SBSN with low efficiency and low risk levels and SUN with high efficiency and high risk levels, the method to be used is the final stage method of the efficient frontier portfolio model through the results of efficiency calculations and portfolio risk that has been obtained previously is then plotted into a graph that has been processed in the Efficient Portfolio Frontier software to obtain an efficient portfolio point or outline. For more details, the Frontier Efficient Portfolio Graph is shown in figure 2: Source: The data is processed by researchers from the calculation of the Frontier Efficient Portfolio method, June 2019. The SBSN and SUN Frontier Efficient Portfolio graph above shows one of the most efficient portfolio points, namely at the risk level of 0.14% with a profit rate (efficiency) of 369.31% in the proportion of 60% financing in SBSN and 40% SUN. This indicates that SBSN financing has better performance than SUN financing. In a further analysis, if the development financing system in Indonesia publishes a larger portion of SBSN financing than SUN, it would certainly not be mainstream (general), seeing the comparison of the development portion of the issuance in recent years the two instruments are very much different. SUN with an average financing exposure of IDR So based on the analysis that has been done, Indonesia as a country with a deficit policy taken in the formulation of the APBN needs to consider carefully in finding and choosing each alternative development financing that is right on target.
If viewed in terms of the issuance requirements between State Sukuk / SBSN and Government Bonds / SUN, the most basic difference is that Sukuk uses a capital investment (investment) approach, in this case, must be guaranteed with underlying assets that must be halal (according to sharia compliance) in nature and used in Halal activities, while Bonds use a debt approach that guarantees the principal and interest to be paid to maturity. In theory, the bond issuance requirements do look easier or more efficient when compared to Sukuk which must include assets as a basis for issuance. However, if we look at it with a long-term orientation, the inclusion of this asset makes the government more able to control the issuance of securities because it adjusts to the needs and capacity of the underlying assets. As explained earlier, there was a significant difference between the realization of the value of SBN financing, which was always far greater than the funding needs (APBN deficit). So, in this case, the government will be at the level of being able to control long-term debt.
Meanwhile, because the Bonds use a debt approach, the government must continue to refinancing or issuing bonds to finance maturing bonds. The increase in government securities (SBN) each year includes the refinancing of old debts that are due. Fuad Rahmani's research in [10] generally concluded that the issuance of Government Bonds / SUN which was partly used to cover old debts would pose a risk of the debt trap. This will weaken the government's ability to play its fiscal role as a stimulant of the country's economy and not potentially hamper national economic recovery efforts in the long run. The profit scheme offered by Sukuk, which is Profit Sharing based on Mudarabah and Margin / Fee contracts based on an ijarah agreement, is certainly different from the profit-based SUN issuance scheme. So that any nominal amount of Sukuk issued as long as it is in the benchmark (benchmark) of Sukuk rules, the budget deficit covered by the issuance of Sukuk will be safe and stable. Meanwhile according to AAOIFI in [20] the capital investment approach in Sukuk makes sukuk sale and purchase transactions deemed capable of integrating the real and financial sectors because sukuk ownership can be evidence of ownership of underlying assets for issuance.
However, at present, the planned move of the capital from Jakarta to East Kalimantan has been officially chosen and announced by President Joko Widodo as the center of Indonesia's new government. Despite the controversy and debate arising from the emergence of the capital city transfer plan, at least IDR 466 trillion is needed and up to 24 years is needed for a stable process of infrastructure development mainly in the energy, telecommunications, and transportation sectors which plans to commence in 2024 [4]. It seems that the need for infrastructure spending will again become a priority for President Joko Widodo's administration in this second period. By looking at Indonesia's potential development financing needs that are quite large in the coming years, the sukuk financing scheme can actually be an alternative solution for infrastructure financing that can maintain fiscal sustainability in the long term. Compared to issuing debt or bonds which have recently become alternative financing for national strategic projects to cover the need for infrastructure funds, in fact, this scheme has a much greater risk especially in terms of movements in reference interest rates which play a major role in determining the efficiency of development financing infrastructure in Indonesia.
Currently, the sukuk innovation model is developed by optimizing the use of waqf assets. The Sukuk model that uses waqf land as the underlying in issuance will eliminate the costs of procurement of underlying assets, as the cost of asset acquisition is a logical consequence in the issuance of sukuk. According to [21] in his analysis related to the optimization of infrastructure development through productive waqf innovations stating that the use of waqf land as an underlying asset in sukuk issuance can provide a multiplier effect, because cost efficiency is obtained not only at the time of issuance of waqf sukuk, but the government can make savings when development activities are carried out. The integration of waqf land assets with sukuk financing instruments especially by using the contract of Ijarah Al Muntahiya Bittamlik can provide a more efficient cost guarantee in the implementation of  16 development. To implement the design, the government needs to conduct a deeper study and coordinate with various related institutions in order to realize the implementation of the waqf sukuk design as one of the sources of development financing instruments in Indonesia.

Conclusion
From the results of the analysis and discussion above, the researcher can draw the conclusion that the performance of SBSN financing is better than the financing of SUN. This assessment is based on several considerations: First, data on the development of issuance and outstanding of SBSN and SUN as well as outstanding foreign currency SBN for the period of 2014 to 2017 generally illustrates that SBSN in Indonesia is growing fast and supporting financial inclusive programs. However, the contribution of SBSN to development financing is still low. This is evidenced by the data portion of SBSN issuance in Indonesia is still relatively very small when compared to the SUN.
Second, an analysis of the efficiency level shows that in general, the SUN has higher profit (efficiency) levels compared to SBSN. The efficiency ratio shows the average level of profit of the SUN for the 2014-2017 period of 495.45%, while the SBSN amounted to 285.21%. While the calculation results of the Data Envelopment Analysis (DEA) method show that Bonds produce a value of 1 which means relatively efficient or has the best ability and shows the position of Constant, which means that if an additional 1% of SUN input will result in an increase in output in the same proportion, whereas SBSN produces a value of 0.91017 which means the relative inefficiency or ability is still below the SUN that has been efficient and shows the position of Decreasing which means that if a 1% increase in input will increase output smaller than 1%.
Third, SUN carries a higher level of risk compared to SBSN. The calculation of the Value at Risk (VaR) method shows the results with a 95% confidence level the chance of a loss in the issuance of SBSN is 0.15% with a maximum possible loss of IDR 210.7 billion to the average total issuance of IDR 140.4 Trillion each year, while in the probability of loss bonds is 0.16% with a maximum possible loss of IDR 774.4 billion to the average total issuance of IDR 465.3 trillion per year.
Fourth, the SBSN financing portfolio for the 2014-2017 period has better performance than the SUN. It evidenced from the calculation results of the Efficient Portfolio Frontier method which shows the most efficient portfolio point at the risk level of 0.14% with a profit rate (efficiency) of 369.31% in the proportion of 60% financing in SBSN and 40% SUN.


The Innovative Exploration of Culture and Tourism Industries in Shenzhen Under Industry Convergence

The convergence of industries has been an emerging trend for the global economy in recent years. Nowadays, the mutual development for culture and tourism industries is strongly supported by the government; Shenzhen, the pilot demonstration region, in this context, becomes a model city for innovation of the deep culture and tourism industries convergence. This paper, based on the analysis of the current situation of culture and tourism industries in Shenzhen, discusses the issues and defects in the process and puts forward the innovative methods and development mode for industries convergence. Through the innovation of technology, management, resources, and channels, the culture and tourism industries could develop a strategic relationship chain with value-added functions. Furthermore, through industrial penetration, industrial restructuring, and industrial extension, the new cultural tourism space with historical significance will eventually be constructed. This paper provides a new perspective on the integrated development of the culture and tourism industries in Shenzhen.

INTRODUCTION
Nowadays, the typical global industrial development is in converging, intelligent, and low-carbon trend. In this case, the integration of culture and tourism industries is in accord with the macro environment of the professional remodeling of industrial structure and industrial form. The first session of the 13th National People's Congress in March 2018 has approved the merger of the Ministry of Culture and the National Tourism Administration into the Ministry of Culture and Tourism to facilitate the development of culture and tourism industries. On 18 August, 2019, the Central Committee of the Communist Party of China and the State Council issued the Opinions on Supporting Shenzhen in Building a Pilot Demonstration Region of Socialism with Chinese Characteristics, which implied Shenzhen should develop competitive culture and tourism industries, boost the convergence of these two industries and promote the communication with foreign culture. Currently, culture and tourism integration has become the most concerned issue in the industry and causes close attention. However, critical issues such as insufficient and superficial industrial convergence, defective projects, and lack of the prominent tourist destination image still exist in practice. To address this issue, the analysis on the interaction between culture and tourism industries in Shenzhen will be conducted in the perspective of convergence; and the feasible methods and patterns will be discussed; furthermore, some suggestions for the convergence and development of these two industries in Shenzhen would be put forward.

II. THE CONVERGENCE OF CULTURAL INDUSTRY AND TOURISM INDUSTRY
Industrial convergence is an Industrial economic phenomenon promoted by technology development since the 1970s. As a new industrial development model, it has a profound impact on the progress of social productivity and the transformation of industrial structure. Nowadays, the convergence of the cultural tourism industry has become a tendency for development. Relevant research results can be divided into the motivation and value interpretation of the integration of culture and tourism industries, the mechanism, mode and path of the convergence of cultural tourism, and the practical evaluation of the convergence of cultural tourism industry.
In terms of the motivation and value interpretation of the convergence of culture and tourism, Dai Bin (2018) stated that the understanding of tourism resources from the traditional cultural perspective is limited, whereas the new era needs to be market-oriented to promote the development with the assistance of industrial thinking [1]. Huang Ping (2018) argued that the cultural industry and tourism industry had become a new driving force for high-quality economic development in the new era [2]. In terms of the mechanism, mode and developmental path of industries integration of cultural and tourism, some scholars have conducted research over the specific mode of cultural and tourism convergence, including the interaction mechanism between entertainment and tourism industry proposed by Li Leilei (2005) [3], the integration and interactive development of animation industry and tourist attractions developed by Li Meiyun (2008) [4] and the research of convergence between game industry and tourism industry conducted by Lu Xiaoqing (2009) [5]. Theoretical models were also expounded by several scholars from the perspective of the overall process and development path of the integration of the culture and tourism industry. For instance, Zhang Haiyan and Wang Zhongyun (2010) proposed convergence development through the integration of system concepts to guide the integration of the market from the four aspects of technology, product, enterprise, and market [6]. Shi Yan (2012) believed that the integration of the cultural tourism industry should be explored from the aspects of concept innovation, government leading, market operation, and talent guarantee [7]. Lan Yuan and Chen Yanzhen (2014), based on the development of cultural tourism in Shanxi Province, studied the driving force mechanism and path of tourism industry convergence [8]. For the evaluation of the effect form integration of culture and tourism, Huo Yanlian (2015), by positioning the integration attributes of the cultural industry and tourism industry, analyzed the effects of the integration of cultural industry and tourism industry [9]. Hou Bing (2015) constructed an analytical framework on the spatial form of cultural tourism in the perspectives of material, time, and region [10]. Based on the modified diamond model, Zhang Chunxiang (2018) developed a regional cultural tourism industry evaluation index system with four levels and 45 specific indicators [11].
Luo Shugang, minister of culture and tourism, quoted general secretary Xi Jinping's directive on the convergence of culture and tourism in the "2018 tourism group development BBS" in December 2018: "Tourism integrates material consumption and spiritual enjoyment; tourism and culture are inseparable." Li Jinzao proposed that the integrated development of culture and tourism is not a simple addition but an organic integration. The integrated development of the culture and tourism industry needs a breakthrough in the new era background and policy background. Based on the existing research, this paper studies the innovative development path of the integration of Shenzhen's culture and tourism industries under the background of Shenzhen's "pilot demonstration zone", to realize the in-depth convergence and integrated development of culture and tourism industries.

III. CURRENT STATUS OF CULTURAL TOURISM IN THE INDUSTRY IN SHENZHEN
A. Representative cultural tourism resource In recent years, the cultural industry and tourism in Shenzhen have been developing rapidly, where the added value of the cultural industry is higher than the GDP growth rate in the same period. Shenzhen's cultural and creative industry has maintained an average annual growth rate of 20% since 2003, and reached 262.277 billion yuan in 2018, accounting for more than 10% of the GDP. In the same year, Shenzhen received 139 million tourists, with a year-on-year growth of 5.97%.
Meanwhile, the total revenue of the tourism industry was 160.910 billion yuan, with a year-on-year growth of 8.32%. At present, Shenzhen has nearly 50,000 cultural and tourism enterprises with more than 900,000 employees. More than 3,000 enterprises generate revenue above 20 million yuan, among which more than 40 enterprises are listed in domestic or foreign markets. Creative design, digital games, exhibition services, and other new forms of business continue to emerge.
Shenzhen, while upgrading its industry, has paid more attention to the coordinated development of cultural industry and tourism. At present, the two industries have initially built an interactive relationship with each other, forming a group of representative cultural tourism resources, which are summarized in " Table I  The window of the world is an artificial theme park integrating the world landscape. More than 130 world-famous scenic spots have been built in different proportions, as well as folk songs and dances, large-scale performances, and high-tech participatory entertainment.

Happy Valley
As one of the best theme parks in China, Shenzhen Happy Valley provides more than 100 colorful amusement projects such as China's first suspension roller coaster and Asia's highest roller coaster, wining the best ten theme parks in Asia-Pacific for four consecutive years.

Overseas Chinese Town East
Oct East is the first large-scale national eco-tourism demonstration area integrating leisure, sightseeing, and outdoor sports in China. It includes Chaxi Valley Resort Park, Interlaken Town, Grand Canyon Ecological Park, Hayfield Town and Chaweng Ancient Town, etc.

The Evergreen Resort
The Evergreen Resort is a leisure vacation with a theme of the sightseeing farm, known as one of the ten scenes in Peng City (an ancient name of Shenzhen). The park is divided into the tropical rain forest, butterfly farm, Jurassic park, amusement park, and other areas, with amusement projects including pottery making, fishing, hand weaving, Chinese knots weaving, Tangshan

Shenzhen Museum
The exhibition is based on the history of Shenzhen, highlighting the history of reform and opening up. There are "Ancient Shenzhen" (prehistoric -AD 1840), "Modern Shenzhen" (1840-1949), "Shenzhen reform and opening up history" , and "Shenzhen folk culture" (Qing dynasty) four primary display. Shenzhen Convention and Exhibition Center Shenzhen convention and exhibition center is a large public building integrating exhibition, conference, business, catering, entertainment, and other functions, which has promoted the development of cultural and creative industries.

Oct Loft
Oct Loft is the most distinctive creative industry base in China, combining multiple fields of creativity, design, and art to build creative industrial chains of art, fashion, leisure creativity, design exhibition, catering, and entertainment. Dafen Oil Painting Village Dafen oil painting village was originally a village where a Hong Kong art dealer introduced the oil painting industry and later became a gathering place for oil painting. Oil painting workshops can be found across the village, where the whole process can be viewed on the street.

B. The dynamic and static combination in the products of cultural tourism industry
From the perspective of cultural tourism products, dynamic cultural tourism products, which are represented by cultural festivals and exhibition events, have become a new advantage for Shenzhen to develop its cultural tourism industry. In 2019, Shenzhen hosted 542 significant sports events, including international high-end sports events, highlevel professional club events, and local self-owned brand events, which makes Shenzhen the only city in China with major sports events on land, sea, and air. In the perspective Resources Building art center in March; the First Dafen International Oil Painting Biennale has been held in Dafen Art Museum from 8 January to 24 February in 2019. These activities mention above have vigorously promoted the enrichment and branding of cultural activities. The industry of dynamic cultural tourism products in Shenzhen substantially depends on static products, and the industry of static products become more vigorous due to the reciprocal development of magnetic products, which results in a positive circulation, and stimulates the overall environment.

TOURISM INDUSTRY
A. The lack of depth in the convergence of culture and tourism industries To be specific, the partial development of culture and tourism results in relative imbalance; meanwhile, the positive and reciprocal industrial chain ecology has not yet been developed.
According to Chinese Culture and Related Industry Statistics Yearbook 2018, the number of cultural enterprises with annual profit exceeding 20 million yuan in Shenzhen was only 58.51% of the specific number in Beijing in 2017; and there is a more than 20 thousand in numbers of employees with 519400 people in Shenzhen and 541400 people in Beijing. Even with the real disadvantage, the total assets and profits in Shenzhen were higher than that of Beijing, with differences of 56.121 billion yuan and 4.454 billion yuan, respectively. At the same time, Shenzhen surpassed Shanghai with 81,600 more employees, 322.286 billion yuan more assets and 10.699 billion yuan more profit. However, the total number of Shenzhen tourists in 2017 was 131 million, compared with 297 million in Beijing and 318 million in Shanghai. Similarly, the total tourism revenue of Shenzhen in 2017 was 148.546 billion yuan, accounting for only 27.16% of Beijing (546.9 billion yuan) and 33.12 % of Shanghai (448.5 billion yuan) respectively. It can be seen from the figures above that the cultural industry in Shenzhen develops rapidly, while the tourism industry, on the contrary, is relatively weaker than that of Beijing and Shanghai, and thus, leads to an unbalanced development.
In terms of industrial chain, the upper, middle, and the lower industrial chain has not been effectively connected and extended (Yuan Jun 2011) [12], leading to a poor industrial chain ecology. For example, in the artistic performances relying on cultural attractions, apart from the organizers and venue managers at the upper end of the industrial chain and the audiences and tourists at the lower end of the industrial chain, the publicity media and distribution channels at the middle end also play a crucial role. By integrating the marketing image and spreading it widely, the resource advantage and brand effect of tourism and artistic performances can be further exerted, attracting more audiences and tourists. Meanwhile, the development of upstream industries, such as clothing and fashion, would also be promoted, boosting the development of derivative tourism products. Unfortunately, brand activities like the Impression of Third Sister Liu in Guilin and Everlasting Regret Song in Xi'an have not been formed in the literary performances in Shenzhen. It is a general condition in Shenzhen that the night performances in theme parks are far away from systematic, large-scale, and industrialized, which results in inferior industrial chain ecology in theme parks industry. Tourists' reviews of the above sites, retrieved from the platform of Mafengwo, the most essential tourist destination information and review website in China, are summarized in " Table II". The results suggest that the ratio of bad reviews of theme parks and resorts in Shenzhen is significantly higher than that of the other three cities. "Obsolete facilities", "lack of originality in the game theme", and "unreasonable park project setting" are the main negative comments of theme parks and resorts in Shenzhen, indicating that the overall level of the project needs to be improved.

C. Lack of prominent tourist destination image
Tourism destination image, a critical concept in the overall marketing of tourism, is one of the most important factors to attract tourists (Song Zhanghai, 2000) [13]. As Li Duansheng (2014) [14] stated, the cultural image of tourist regards tourism disciplines and industries as reference standards, using various communication channels to allow people without tourist purposes to recognize and understand

Advances in Social Science, Education and Humanities Research, volume 416
tourist destinations from the perspective of cultural vision and perception. Hence the further psychological desire for cultural tourism and experience would be generated with similar subsequent behaviors, which would ultimately bring economic and social benefits to tourist destinations.
For example, when it comes to Beijing, images like the "imperial capital", "square Hutong", and the Great Wall would come across the mind. As for Shanghai, the typical impressions are "Pearl of the Orient", "Magic Capital", and "City without Sleeping". Guangzhou would remind people of "Dynamic Flower City" and "Pearl River Nightscape". Suzhou and Hangzhou are always honored as "Oriental Paradise". Xi'an is famous for "The Ancient Capital of The Six Dynasties" and "the prosperous Chang'an". Chengdu is known as "The Most Casual City" and "The Food Capital". Chongqing is "Magic 5D City" and "Mist City". Guilin has the most beautiful scenery known as "Guilin Landscapes Are the Best". Xiamen is "City of Literature and Art" and "The Colorful Gulangyu".
However, Shenzhen has not formed a clear and representative cultural image of tourism destinations. During the preliminary survey, 79 outbound tourists of different ages, regions, and income groups were interviewed, of which 63 believed that Shenzhen lacked a clear Tourism cultural image, and 47 people believed that Shenzhen's cultural tourism industry did not produce an excellent cultural image. Only 24 people believed that artistic images such as "innovation" and "young" could attract tourists, but it is generally agreed that the image of Shenzhen has not been widely spread. There is a big gap between Shenzhen and Beijing and Shanghai. Shenzhen still needs to work hard to build the cultural image of tourist destinations.

V. INNOVATIVE PATH AND DEVELOPMENT MODE OF CULTURAL AND TOURISM CONVERGENCE
In combination with the above issues, to achieve the deep convergence of the culture and tourism industries, the two industry constituent elements cannot be superimposed. Based on mutual coupling, we need to update the path through technological innovation, management innovation resource innovation, and channel innovation, restructuring the structure and industry boundary of the cultural and tourism industry in the process of perfecting industry chain.
During the improvement of the path, technological innovation is the fundamental driving force for the innovation and development of the cultural tourism industry, based on which management innovation guides the development of the cultural tourism industry. Resource innovation and channel innovation are the key measures to connect different levels of the industry, and therefore enhance the industrial chain ecology.
Through path innovation, the cultural tourism industry relies on a specific carrier or space to form a strategic relationship chain with value-added functions. After industrial penetration, industrial restructuring, and industrial extension, the cultural tourism space with space-time significance is finally formed, improving the integrated development of the cultural tourism industry.

A. Innovated path 1) Innovation in technology: Technological innovation
is the source of innovation in the cultural tourism industry. With the commercialization of 5G, the development of Shenzhen's cultural tourism industry will have access to technical support such as virtual reality (VR), augmented reality (AR) and mixed reality(MR), which will assist the construction of science, technology and cultural tourism projects like Forbidden City Digital Museum in Beijing. At the same time, it is conducive for the development of industries such as film and television, literature and art, video games, and exhibitions, creating a new hot spot of "technology + culture + tourism". In addition to 5G, it is reasonable to increase the investment in the research and utilization of big data, cloud computing, the Internet of Things, and artificial intelligence in the cultural tourism industry to provide solid technological support for the enterprise. Moreover, the cross-border integration of the Industrial Internet and the Consumer Internet has become an essential engine for the high-quality development of culture and tourism.

2) Innovation in management:
In the integration of the cultural tourism industry, management innovation is indispensable. A government-led, enterprise-centric, and market-oriented overall development model should be formed.
Government needs to play a guiding and coordinating role in cultural tourism development planning and management mechanism transformation; and it is beneficial for enterprises to play the carrier role in promoting the integration of cultural tourism industry; furthermore, the Advances in Social Science, Education and Humanities Research, volume 416 market should be the incentives in industrial operations and marketing, brand integration and cultivation, and capital operations. In this way, an organic and energetic complex of government, enterprise, and the market could be gradually developed. At the same time, based on scientific and technological innovation, the government and enterprise management methods also need to make further technical innovations, strengthen the application of information systems and big data in management decision-making, and promote the formation of new management mechanisms.

3) Innovation in resource:
Resource innovation refers to the innovation of cultural tourism resources, including the innovation of cultural tourism products and services. With the low level of cultural tourism projects in Shenzhen, it is necessary to conduct an innovative transition in cultural tourism resources. For example, it is meaningful to improve the infrastructure construction of static cultural tourism products and cultivate new creative products; it is also essential to enhance the diversity and uniqueness of dynamic cultural tourism products and create a new brand; furthermore, it is necessary to improving the service quality of cultural tourism industry to demonstrate the new trend of industrial upgrading. Here are some advice on specific measures: making great efforts to develop the digital culture tourism industry, combining the theme park ,animation and game industry with technical skills of AR/VR/MR to create a new wonderland with digital-animation-game landscape; making thoroughly advantages of the Shenzhen's pioneering role in the Guangdong-Hong Kong-Macao greater bay area, functioning as linkage of the greater bay area to create new cultural activities and competitions, and promoting in-depth exchanges between young people in Shenzhen, Hong Kong and Macao, eventually forming the excellent brand; the enterprises need to increase the talents introduction, raise the standard of talent training, improve the service quality and eventually upgrade the cultural tourism industry.

4) Innovation in channel:
Channel innovation plays a crucial role in the integration of the cultural tourism industry. In the new digital economy era, how to carry out the marketing and promotion of cultural tourism products to establish an authentic connection with consumers is a problem currently facing Shenzhen. In the traditional marketing model, travel agencies serve as an essential channel to sell tourist products to tourists through wholesalers and retailers at home and abroad and interfere with tourist destinations and tourists' communication and choice. In the era of the digital economy, marketing channels are more diversified. For example, entertainment media in the cultural industry, new social media platforms, and casual online communities are changing traditional marketing models. At the same time, the integration of culture and tourism has gradually raised the concept of "urban marketing". Urban marketing planning is based on urban development planning, with a concentration on innovation and method of the diversified industrial chain. Furthermore, the urban brand marketing is far more than the local tourism products, and it is more about the urban cultural image and cultural atmosphere. To realize the deep integration of the culture and tourism industry, it is necessary to innovate on channels, actively connect the tourism industry with the cultural industry, and integrate and innovate in the process of forming the value chain.

B. Development mode of convergence 1) Industry penetration
Industry penetration refers to the content penetration and channel penetration of the culture and tourism industry, and the traditional boundary between the two industries is gradually blurred, such as tourism performing arts, e-sports locations tourism, and tourism cultural promotion. Cultural tourism is an integral part of the modern service industry. The penetration of the cultural tourism industry is conducive to accelerating the supply-side structural reform of the cultural tourism industry. Driven by technological innovation and development, the cultural industry in Shenzhen could benefit from tourist attractions, natural landscapes, and creative spaces to achieve further development. Tourist attractions can rely on media channels of the cultural industry for marketing, such as shooting advertisements and promotional videos and conducting publicity on the Internet. Through mutual integration and infiltration, the cultural industry can take advantage of the popularity of its attractions and customers to sell more products and build its brand.
Similarly, on the one hand, tourist attractions can increase their exposure and visibility through the media channels of the cultural industry, and on the other hand, industrial penetration is conducive to the development of more tourist cultural products. For example, during the development of the game "The Great Tang Dynasty", the mountain forest scenic area in Lishui, Zhejiang province, was virtualized as a scenic game spot, realizing the integration of online games and tourism. Shenzhen has a large number of high-quality online game companies, can also think about how to adapt to local conditions. We should encourage the cooperation between Shenzhen cultural and creative enterprises and tourism groups to promote the content penetration and channel penetration of the cultural tourism industry.

2) Industrial restructuring
Industrial restructuring refers to the reconfiguration of influential elements of cultural tourism resources, including the merger and reorganization of significant enterprises in industries, to eventually achieve the coordinated industrial development. At present, there is a substantial market for high-quality cultural and tourism products and the performance of relevant enterprises will maintain a rapid growth trend. Wei Changren, founder of Jinlv.com, pointed out that the pace of mergers and acquisitions of the cultural and tourism industry is expected to accelerate in the next two to three years. With the intensive implementation of the new Advances in Social Science, Education and Humanities Research, volume 416 policies to promote consumption and the consequent promotion of cultural tourism consumption since 2018, many listed companies in the cultural tourism industry have impressive performance. In 2019, new rounds of cultural tourism planning have also been introduced in various places to accelerate the restructuring of tourism groups. To further promote the deep integration of Shenzhen's cultural tourism industry, it is necessary to implement industrial restructuring with centralized direction and resources, forming a group of industry-leading enterprises with considerable assets, strong core competitiveness, industrial chain, and ability of regional integration. Meanwhile, it is meaningful for these leading companies to make strong efforts to supporting and cultivating small and medium-sized cultural enterprises. At the same time, to combine spectator-type tourism with scenic spot brands is worth trying, and it may also develop convention and exhibition tourism, creative cultural tourism, and sanatorium tourism.

3) Industrial extension
Industrial extension refers to the extension of cultural and tourism industry chains to realize complementary functions and create new flows and added value. The emerging "research tourism" industry is an extension of the cultural tourism industry. At present, the Ministry of Culture and Tourism is working out a series of product standards for research tourism, which will be further expanded in the future to meet the needs of study Tours at all levels, social strata and age groups. At the same time, the current tourism model has changed from sightseeing to leisure, with selfdriving tour, self-service tour, and other tourism modes emerging in recent years. Upstream industries must make accurate responses to the market dynamics, such as developing a boutique niche "recruitment tour" and "cultural experience officer tour". In the process of integrating the cultural and tourism industry in Shenzhen, film and television IP, amusement park, large-scale cultural and sports venues, performing arts services, and other industries can be extended. For example, the film "Better Days" takes the mountain city of Chongqing as the shooting place, which makes "web celebrity" Chongqing accessible again, while the film and television work taking Shenzhen as the shooting place are very few. In 2018, original content and technology platforms emerged one after another. Original short video and series of micro-video business models can better promote the development of original content and are also the booster for the extension of the cultural tourism industry. The "bowl Wine" on TikTok makes Xi'an the most desirable place to visit. This new industry not only connects the upstream and downstream of the tourism industry as a social medium but also completed an extension to e-commerce. At present, Shenzhen has Tencent and other leading Internet enterprises. It is more appropriate to make good use of Internet resources, promote the extension of the cultural tourism industry, and form a complete industrial chain with cultural tourism as the core and the development of related industries.

VI. CONCLUSION
To achieve the meaningful integration of the culture and tourism industries, it is inevitable to further the structural reform of the cultural tourism supply side. We need to combine the hardware upgrading and software optimization, integrate the qualified service and the cultural experience, and elaborate new forms of integration and development. Through methods innovation, namely technological innovation, management innovation, resource innovation, and channel innovation, the structure form and industrial boundary of culture and tourism would be reconstructed in the whole industrial chain process. Technological innovation refers to the development and system construction of cultural tourism products in combination with 5G, big data, cloud computing, artificial intelligence, and other technologies, which are the fundamental incentives for innovative development of the cultural tourism industry. Management innovation is the innovation of government-led, enterprisecentered, and market-oriented management mechanisms, and it is the only way to fulfill the development of the cultural tourism industry based on technological innovation. Resource innovation is the innovation of cultural tourism resources, including the innovation of cultural tourism products and services. Channel innovation is the innovation of marketing channels of the cultural tourism industry. These are the key measures to get through the upstream and downstream of the industry and form useful industrial chain ecology. Through the methods innovation, the cultural tourism industry depending on specific carriers or space could form a strategic relationship chain with value-added function. In the progress of industrial penetration, industrial restructuring, and industrial extension, these three industrial integration modes will eventually form cultural tourism with historical significance and realize the integrated development of the cultural tourism industry.


Sustainable Solutions for Better Public Road Transportation

Transportation undoubtedly fastens economic growth by providing ways to initiate various modes. Population explosion, industrialization, and urbanization created more challenges to environmental stability. Urban transport is one of the essential components of urban development. Sustainable transportation includes the most efficient and convenient movement of people and vehicles with the least amount of energy, congestion, and environmental impacts. Therefore proper sustainable transport solutions are needed to pace with the developmental process. The paper attempts to provide some solutions that can ensure better human health and protection of the environment. These solutions include minimizing toxic gas emissions, electro mobility, road traffic management, congestion pricing, better parking policies, etc. These ecofriendly modes can improve the quality of public road transport and human life.

Introduction
As more and more percent of the population gets engaged in economic activities, especially in manufacturing and service sector activities, the demand for travel naturally increases. And as young people seek education in faraway places, the demand for travel also gets enhanced. Studies have shown that more than 75 percent of the increase in travel demand in cities in India is accounted for by employment and education needs (GOI, 2005). Travel demand is met by an array of modes of transport like private vehicles, including cars, twowheelers, rail services, and public transport. Among these, public transport is the most reliable and affordable means of transport for people at large. In a country as large as India, road transport net work is indispensable to ensure the mobility of both people and commodities. Although road transportation is not as eco-friendly and energy-efficient as other alternative modes like rail and water, given the geographic terrain and the remoteness of places in India, road transport appears to have no other immediate alternative. Yet, in the face of the growing concern of environment and exhaustion of fossil resources, attempts have been made to fine-tune road transportation to the requirements of emerging sustainable transport. In this paper, an attempt has been made to present certain instances of sustainable road transport modes in India.
India ranks second position in the world's road network. It covers approximately 6,603,293 kilometers. Increasing population and urbanization over the years created a sphere of increased mobility of the people. People's travel demand increased from their own economic, social, physical, psychological needs. This also led to the growth of the vehicular population. Road transportation attains more importance in India's scenario, even though it has several inefficiencies compared to water and air transportation modes.
Along with traffic congestion, inadequate transport facilities, environmental problems, air, water, noise, and land pollutions are growing over the years. The development of transportation created so many changes in our travel behavior like travel time, cost, selection of the mode of transport, etc. There is always a gap between the transportation demands of people and the efficiency of transport infrastructures. Whenever this gap increases, there continues the problem of unsustainability.
The term sustainability includes more comprehensive meanings. According to World Bank, 'Sustainability is defined as the condition in which there are a balance and stability between social, economic, environmental and physical factors, satisfying the present needs as well as not compromising on the ability of future conditions.' Sustainable Transportation can be defined as the most efficient and convenient movement of people and vehicles with least amount of energy in terms of fuel and efforts, at most favorable costs and with least amount of congestion and environmental impacts which would help to attain the continuous economic development without having negative environmental impacts. These solutions include minimizing toxic gas emissions on the environment, Electro mobility, Road transport management, Congestion pricing, parking policies, etc.

Sustainable Transportation can Ensure
• Improvement in the quality of life of people and the environment • Efficient use of natural resources • Meeting the needs of the present generation without compromising the needs of future generations • Ensures the emission standards of pollutants • Selection of better means of transportation consistent with the ecosystem • Application of public transport planning to solve various problems associated with public transportation

Sustainable Transportation Solutions Minimizing Toxic Gas Emissions to the Environment
The transport sector contributes around 70% of environmental pollution in India. There is a direct relation between road transportation and environmental pollution. Emission from the road transport sector depends on the fuels used for transportation. Usage of emission-reducing fuels and a model switching to public transportation will help to reduce toxic gas emissions to the environment. In Delhi, the usage of CNG was made compulsory for all public transport vehicles in 2000. Some measures for controlling toxic gas emissions to the environment by the transportation sector are: • Removal of old buses from the road unless they use CNG or other clean fuels. • It is regularly cleaning of fuel and air filters. • Make emission testing for all vehicles.
• Application of congestion reducing policies, especially during peak hours. • Organize public awareness programs to make people better aware of issues relating to toxic gas emissions to the environment. As a developing country, India needs to control these emissions by adopting appropriate planning strategies. It is expected that the number of vehicles on the road will double to 250 million by the year 2025. Therefore as an emission-reducing strategy, customers are needed to follow the latest emission standards as far as possible.

Kochi Public Transport Day-A Unique Experience in Kerala
Launched in December 2010, in the backdrop of the inauguration of the Vytila Mobility Hub, Kochi Public Transport Day, or Bus Day 1 , is a unique 1. The concept is originally mooted by the Centre for Public Policy Research (CPPR), a think-thank based in Kochi. campaign to sensitize the daily commuters and the residents of Kochi city about the private and social benefits of using public transport instead of private vehicles. The main intention behind this is to reduce single-occupancy vehicles on the roads of the city, which makes more traffic congestion besides adding to the quantum of carbon emission per day. The first thing to motivate the commuters to use public transport is to provide them with sufficient buses with required comforts. For this, private and public participation mode can be resorted to. Private buses are to be made available on the roads, especially at peak hours. A City Bus Corporation can be floated to facilitate public transportation in the city with the participation of both State-owned corporations and the private bus owners. To make traveling comfortable for differently-abled people, the concept of inclusive transport can be adopted. But the pertinent question is whether this Bus Day celebration has been able to meet its state objectives (Praveen, 2016).
One important thing which deters passengers from using public transport is the difficulty of getting information regarding the time of arrival of buses at pick up points. On account of this, passengers are likely to lose a lot of time in pick up points, and this ultimately affects their efficiency in time utilization. To address this problem, Chalo App has been devised to track the arrival of buses. Passengers can download this App in smart phones and track the time of arrival of buses in their pick points to arrange their travel. Unfortunately, unlike rail timing Apps such as 'Where is My Train,' this App does not appear to be popular among the commuters of public transport. With the inclusion of more specification in the App, it can be made more interesting and useful to the commuters.

Congestion Pricing
Traffic Congestion, a common catastrophe of Indian roads, especially urban roads, is caused by twin factors: the escalation in the number of vehicles 2 . on the road and the lack of concomitant 2. It is found that in six major Indian cities, growth in the number of vehicles has outpaced the growth in population. Between 1981 and 2001, population in these cities on an overage increased only 1.89 times whereas number of vehicles shot up more than 7 times. But this growth is expansion of road network plus the problems in the widening of existing roads network. Congestion has both private and social cost. Its private cost lies in increasing fuel consumption and decrease in working hours on account of being trapped in traffic congestion while its social cost lies in increasing air pollution and other kinds of external harmful effects like that of on the human health. Overall economic efficiency will get adversely affected if congestion on raods crosses a certain limit. It is estimated that in busy lanes of Kolkata the average speed of vehicle gets reduced 10 km per hour during the peak time. The idea of congestion pricing in peak hours works as a penalty for those who drive in peak hours. If due to congestion pricing some travelers keep themselves off the roads, this will help improve the travel time of others. Besides, this will reduce the intensity of carbon emission during the peak hours. However, studies conducted on the effectives of congestion studies in Bangalore city, one of the busiest cities of the world, have shown that the congestion pricing polices do not turn out to be effective (Kreindler, 2019).

Car Pooling and Share Taxi
Carpooling is possible among the coworkers of an organization who have to daily commute to the working place. Under carpooling one worker with a private vehicle allows other coworkers to use the same to the daily commute to the working place and the users share the expenses. This works out to be a good idea and has been popular among the elite working class who otherwise would have used their private vehicles to travel daily to their working places, increasing congestion on roads and creating air pollution. The basic intention behind this is to reduce the number of single-user vehicle on the roads, the social cost of which is enormously higher. Car Pooling has an inbuilt mechanism to motivate the passengers to avail of this facility. This has the advantage of too little intervention from outside to promote this kind of travel mode.
highly observable in cities with poor mass transit system. But in Kolkata and Mumbai where rail based mass transit system is in existence, this growth in the number of vehicles is comparably very low. Nevertheless, the institutions can create some stimulus to encourage their workers to use Car Pooling effectively. This will effectively reduce the travel budget of the Companies. Online taxi cabs like Ola and Uber offer share taxi services, which replaces the necessity of a passenger incurring expenses for traveling in a single-vehicle. Passengers heading to a commonplace can avail of these services, which burns the pockets of passengers a little lesser (private cost) apart from considerably reducing congestion on roads and pollution of air (social cost).
The above described are some of the instances of sustainable transportation that reduce both the private and social cost of traveling in a big way.

Electro Mobility
Fossil fuel-based vehicles not only pollute the air but also results in the decline of non-renewable energy for future generations. The excess extraction of such fuels may cause irreparable damage to the ecosystem. Considering these drawbacks, more attention has been paid to electric vehicles in recent times.
Electromobility is the use of electric vehicles to reduce toxic gas emissions and to improve air quality. These vehicles are fully or partly driven electrically. Unlike gasoline and diesel vehicles, they don't emit any carbon die oxide when driven. Therefore they are more ecofriendly. However, electricity is cheaper than fossil fuels.
Moreover, electric vehicles require less maintenance and repairs. E buses will deliver high performance and have a high efficiency than vehicles with a combustion engine. One of the main goals of the Indian energy sector is to make electricity as a prime energy source. Electromobility contributes more to solve environmental challenges through renewable electricity sources. The government should ensure apt demand and supply-side incentives to boost the electric vehicle industry in India. Mass transportation run on electricity or other efficient fuels would make transport more convenient, safe, and efficient both for people and the environment.
Delhi, as one of the world's largest CNG, propelled bus fleet, to realize its dream to have clean, green, and people-centric mobility, planned to deploy 1000 electric vehicles for connectivity and several public charging and snapping stations in the next year. The Draft EV policy 2018 by the Delhi government sets an ambitious target for battery electric vehicles to make up 25 percent of new vehicle registrations and to make 50 percent of the public transport bus fleet zero emission by 2023. The broad objectives of this Draft EV policy include Better air quality, Reduced noise pollution, Enhanced energy security in combination with low carbon power generation mix. Several states have also announced an EV policy for sustainability (eg. Kerala, Karnataka, Telangana, Maharashtra, Andra Pradesh, and Uttar Pradesh.
In Kerala, over 10 million vehicles on the road have created serious mobility challenges accompanied by increased road accidents and air pollution. Therefore E-mobility is considered as a sustainable solution for protecting its biodiversity. It will provide a comfortable free ride with shared mobility and energy efficiency. For this, KSEB will participate in e-mobility development by ensuring the optimally high base load on the grid at attractive power tariffs. KSRTC currently procures around 1000 new buses annually, and some of these can be replaced with EVs and appropriate sizing of the batteries, charging infrastructure, and innovative electric tariffs. The reduction in maintenance cost of electric buses, reduced breakdowns losses, reduction of fuel cost per km can be securitized for a longer period and used to service the initial capital cost of EV buses.

Road Traffic Management System
An Intelligent Road Transport System aims to provide innovative services relating to different modes of transport and traffic management to users and also make them safer, better informed, and more coordinated and smarter use of transport (Sarkar& Jain-2018). Various technologies are part and parcel of this system, which include; traffic signal control, message signs, speed cameras, parking guidance and information, weather information, etc. Along with this, efficient roadside infrastructures also empower the system controlling by providing route guiding, speed limiting systems, etc. Smart transportation in modern days like vehicle sharing, implementing smart parking solutions, etc.

Congestion Pricing
Traffic congestion has been one of the major issues that cities are facing. According to a study conducted by Boston Consulting Group (BCG), Traffic congestion during peak hours in Delhi, Mumbai, Bengaluru and Kolkata together costs Rs 1.47 lakh crore annually. The term congestion charging is used to describe a distance, area, or cordon based road user charging policy around congested city centers. Congestion pricing is also known as value pricing, peak-period pricing, time of day pricing, etc. ERP (Electronic Road Pricing) is considered as a systematic tool for measuring congestion. The charging zone would cover the areas that are perceived to be the most congested ones. Charges would be highest during peak hours. The strategy of congestion pricing regulates demand and helps to manage congestion without increasing supply. It makes the consumers pay for the additional congestion they create or for the negative externality during the peak demand. This will make users more aware of their impact on the environment. Congestion pricing may be in the form of cordon based, distancebased, or time-based.

Figure 1
The Boston Consulting Group (BCG) is the world's leading advisor on business strategy. According to their study on indexed estimated growth in travel demand in countries of Southeast Asia, almost all countries experienced an alarming growth rate in travel demand over the years ( Figure  1). India's rapid growth of population over recent decades has led to a considerable expansion in travel demand. According to a BCG study on the relationship between transport demand, population and wealth transport demand has increased by almost eight times since 1980. Indian cities are mostly congested in the world ranking. Delhi, Mumbai, Bangalore, and Kolkata together costs USD 22 billion per year. These cities are needed to reduce their dependence on private vehicles and to opt for desirable and efficient public transport solutions to face related problems.

Parking Policies
For sustainable mobility, parking policies should be effectively integrated to better transport plans. Parking policy is considered to be one of the key links between transport and land use policy (Marsden, 2006). Governments are framing parking policies to reduce congestion on roads. The conventional parking policies which gave more importance to increase parking supply have failed to reduce parking pressure, congestion, and pollution. To overcome this, The National Urban Transport Policy (NIPT) of 2014 has recommended a grade scale of parking fees to recover the economic costs of parking in India. A model shift to public transport can ensure sustainability in transportation. Some parking solutions for sustainable mobility can be enlisted as; • Underground parking is proposed in highly congested areas. • For long term parkers, off-street parking is proposed rather than on-street parking, because it can save street space. • Parking priorities should be provided first for physically disadvantaged than for short term parkers, and then for long term parkers. • They are charging of penalties for long term onstreet parkers. • Mitigation of all types of illegal parking.  In India, street parking is free or minimally priced in all cities compared to other countries. Due to these lowest parking fees, it fails to recover the cost of investment. Restriction on personal vehicle usage and free parking along with appropriate parking area management plans and intellectual pricing policies will help to achieve the targeted controlled demand for parking in cities.

Conclusion
Sustainable transportation includes the most efficient and convenient movement of people and vehicles with the least amount of energy, congestion, and environmental impacts. Increased mobility of people as a result of population explosion and urbanization questioned environmental stability on a wide scale. Therefore some sustainable solutions are needed to make the transport sector more efficient. Reducing toxic gas emissions to the environment through emission-reducing fuels and a model switch to public transportation is such a solution. Electromobility as a solution will help to improve air quality through the use of electric vehicles with the least cost compared to other fossil fuels. Better transport management, as a solution provides innovative services and policies to users. Along with this, congestion pricing and better parking policies will contribute more to efficient and environmentally friendly transportation practices.