The Jakarta Globe’s Tabita Diela sat down with National Development Planning Minister Bambang Brodjonegoro in early October to discuss urbanization in Indonesia.
The minister recognizes the huge potential urbanization could bring and lays out the government’s plans to negate some of its negative effects.
Here is an excerpt of the exclusive interview, which has been edited for brevity and clarity:
According to a World Bank study, cities in Indonesia are growing faster than those in other Asian countries and 68 percent of Indonesians will live in urban areas by 2025. How does the government view this trend?
First, urbanization is not a national phenomenon, much less local. Urbanization is a global trend. I read a book that tries to predict the future until 2050; one of the characteristics of the world in the future is global urbanization. In my opinion, Indonesia is indeed following the global pattern and what we see today is already halfway there.
If we try to extrapolate it to 2030-2045, urbanization is close to 80 percent. Urbanization will only be stronger and this happens because it is a global trend.
The way I look at it, urbanization is a global and unavoidable trend, it cannot be avoided anymore. So, the most important thing is that we have to manage urbanization so it becomes an asset. Especially from an economic growth point of view, we see that Indonesia has yet to optimize the potential of urbanization.
There is a relationship between urbanization and the income of a society. Malaysia’s level of urbanization is 75 percent and the country’s per-capita gross domestic product is already $9,000.
Urbanization in Indonesia is at 54 percent and its per-capita GDP is still $3,000. Well, we see a pattern here: The higher the level of urbanization, the higher the per-capita GDP will be.
Urbanization, as long as it is managed well, will increase per-capita GDP. However, our ability to raise per-capita GDP from urbanization is relatively small.
One percent of urbanization in Indonesia will increase the per-capita GDP by 4 percent. In Thailand it is one to seven, we are one to four. Vietnam one to eight, China one to 10, while in India it is one to 13. If we could make our urbanization be like in India or China, it means urbanization will make people more prosperous.
Indeed, the source of growth is in the city. Indonesia is originally an agrarian country […but] the agricultural sector does not need too much labor anymore, that is the point. Agriculture can be more productive because of fertilizers, [better] seeds and agricultural tools, so agricultural production levels can be maintained without disruption by urbanization.
One more thing to clarify; people always associate urbanization with people moving from the village or rural area to the city. But there is another kind of urbanization where a rural area becomes a city.
Population density there is increasing, because the number of people moving into the area is higher than those moving out. Or because the area is near a city, it eventually becomes an urban area. Case in point is the greater Jakarta area. Jonggol is still part of Bogor district and not recognized [administratively] as a city, but it is now an urban area.
How does the government prepare for these new urban areas?
First, what we must recognize is what problems arise if a region becomes increasingly urbanized; the population is growing. Well, we certainly know there will be bottlenecks.
The first problem is traffic congestion. Second, the possibility of land conversion. That is for sure, that is what happens when a village becomes a city. Then the third is a lack of public transportation, in terms of fleet availability and routes. Fourth, increasing environmental pollution and fifth, potential economic losses due to the higher population density.
Well, that means the city must be prepared. If I could issue an order, number one would be public transportation. Small- to middle-sized cities can make do with bus networks. Big cities must have rail-based public transportation, either light rail transit, or mass rapid transit for megacities.
Then, strict zoning regulations. In my opinion, the city government must be disciplined with its zoning regulations, otherwise it will harm the city. The required cost to repair the damage will be greater. For example, if houses in designated residential areas are allowed, one by one, to become commercial properties, before long it becomes a commercial area that leads to traffic jams. Look at Kemang [in South Jakarta]. The cost to overcome traffic congestion in Kemang is much higher than it would have been had it remained a residential area.
The third, which is no less important, is basic infrastructure for urban residents. It is usually clean water, sanitation. Then there must be a sewerage network, adequate drainage and so on.
I think these three are the basic requirements for our city to survive with a growing population.
How does the government envision the quality of life in cities for Indonesians?
A good quality of life in my opinion is when one does not need to spend too much time on the road and all the basic infrastructure for living is available.
For example, clean drinking water. Jakarta is still far from ideal, because most of the tap water comes from wells dug by residents themselves. It is not ideal, because it causes the intrusion of seawater.
Now, the Monas [National Monument] area [about 6 kilometers from the Jakarta beachfront] is experiencing seawater intrusion. So it is imperative that the city must provide a network of clean water for everyone.
I imagine big cities in Indonesia will have two main characteristics: One, does it have rail-based public transportation? Two, is most housing landed or apartments? If most are apartments, then it is a big city.
The critical things that must be maintained here are the real income of city dwellers. A family’s biggest daily expenses are for transportation and housing, not food.
The losses resulting from traffic congestion amount to approximately $5 billion per year in Jakarta alone, even after excluding the environmental impact, such as pollution and fuel wastage.
Many urban projects are now tackled by state-owned enterprises. How can the private sector contribute to the development?
I avoid giving entire projects to the private sector. Public-private-partnerships are more suitable, so the government’s role remains as the job provider, especially in big cities. Clean water distribution, or its raw source, for example, can be outsourced to the private sector.
With waste water, it might be more suitable for the private sector to manage installations and sewerage treatment. It is possible for the waste to be managed jointly by the government and private companies, including collection, or to add value, as most in the private sector want.
The ideal waste management system for big cities is one that turns waste into something else; the most ideal is to turn it into energy. The potential for turning waste into electricity is enormous in big cities.
Digital technology plays a big role in the lives of Indonesian city dwellers today. How does the government plan to adapt to this trend?
I just returned from Seoul. [The city] has a command center that can see throughout Seoul; including congested crossroads, buses that are out of operation, or which trains are running late. It is comprehensive. That is part of the ideal smart city we envision.
But in the Indonesian context, I think the definition of an Indonesian smart city should begin from smart economically: We do not want a great city that has CCTV everywhere but lacks clean water. So for me, before we get to the ideal smart city, we should get the basic infrastructure in place first.
The people’s basic needs are housing, clean water, sanitation and electricity. We do not want dualism between a high-tech community […] and those who cannot even fulfil their basic needs, or lack access to basic infrastructure.
A smart city should be done in stages and the most important thing is that smart cities should begin with the e-government. That, I think, is the most important first step because that shows government can serve the people electronically.
E-government is part of a local government initiative. Nationally, we are preparing for a presidential decree on e-government, which will be led by the Ministry of Administrative and Bureaucratic Reform.
The presidential decree will define which government services should be done electronically, including e-budgeting, e-monitoring and e-evaluation.
So, we will begin the approach nationally. We appreciate the regions that have started, but for e-government, we will have a national strategy that can be translated or replicated in every region.
The presidential decree is currently at the Ministry of State Secretariat. We hope the decree will be issued by the end of this year.