Is it important?
History shows that the more a nation develops, the more urbanized it becomes. Indonesia’s urban population has increased from about 100 million in 2005 to about 120 million in 2010. It is projected to be 150 million in 2015 and more than 200 million in 2030, when its rural population will drop to about 75 million, from about 100 million in 2010.
The number of municipalities has increased from four in 1950 to 98 in 2012. The disparity between western and eastern Indonesia also shows itself in terms of urban contribution to the gross domestic product. Western Indonesian cities’ contribution is more than seven times that of eastern Indonesian cities.
Indonesia’s metropolitan population, which is only 15 percent of its total, contributes 27.17 percent of its national gross domestic product (GDP).
More than half of the metropolitan population work, while only 1.69 percent of small-town populations do. In between, big and medium-size cities have respectively 21 percent and 22 percent of their population who work.
In 2015 our urban population will pass 60 percent of the total population.
The urban population is getting “smarter” and more “middle class” as university graduates in the cities are increasing dramatically to close to 6 million in 2012, from about 3.5 million in 2008. With that comes an increasing demand for services and other consumables, as well as a higher standard of everything. In transportation more people have changed to motorized private vehicles from public and non-motorized transportation. The Jakarta metropolitan area is just an extreme example.
And while the percentage of the urban poor may be decreasing, the total number is not. In Jakarta, government data records 392 neighborhood units (rukun warga) as slums. Meanwhile a pro-poor NGO reports 64 urban poor kampungs, covering a total of 216.2 hectares in Jakarta. The poor might be less visible in the coming years, as the image of the middle class materialize more on the urban facade, but they will be there as a challenge to social justice.
In short, the future of the country is in the cities. Urban development not only demands more natural resources, it may also destroy those reserves.
It is quite odd that the country now has a law on rural governance, despite the fact that the population is urbanizing irreversibly and increasingly. The rural population is decreasing in share and in absolute numbers.
In fact one of the problems of Indonesian urban governance is that many urbanized areas are still governed by rural governance because they are located within the jurisdiction of largely rural regencies. The populations in those areas are not duly served, as the governments in those districts consist only of units that are rural in character and scope. Coastal reclaimed lands cannot automatically be incorporated into the nearest city’s jurisdiction because there is simply no regulation on the matter yet.
The problems described above are only among those in the backlog.
Even more pressing are the problems that Indonesia will face in the near future.
All of its medium-to-large cities are facing the threat of traffic jams, floods, and basically all kinds of infrastructural shortages. Not only do the cities desperately need more infrastructure as soon as possible, but also the “right” types of infrastructure — the types that help to change toward an ecological age. Old infrastructure needs to be retrofitted or replaced with sustainable ones. Building the right kinds of infrastructure to make cities sustainable is not a burden, but an investment in more competitive future cities.
Indonesian cities are entering another property boom. Unlike the previous one in the 1980s and 1990s, the current boom is marked by the rise of secondary cities outside the traditional towns of Bogor, Tangerang, Bekasi and Depok. Massive property developments are taking place in medium-size cities such as Malang in East Java, Kendari in Southeast Sulawesi, and many others.
The year 2014 also started with the enactment of property-tax decentralization. These taxes, which were previously under the national government’s authority, are totally devolved to the third tier, which consists of the largely rural regencies and cities. As property taxes are powerful instruments, managing them can be very beneficial as well as being potentially disastrous.
As already apparent, city governments, including Jakarta’s, are already moving to increase the tax rates to achieve a huge increase in city income, but there seems to be no strategy yet on utilizing the taxes as an instrument to, for example, control land use, which is of utmost importance for cities to be able to ensure a better quality of life and to ensure an integrated public transportation system, among other things.
The larger emerging urban middle class poses another challenge. With ever more expendable income they will soon produce more garbage with a dramatically higher percentage of inorganic garbage. Both the total amount and higher percentage of inorganic garbage require revamped management and methods. The rise of this urban middle class is now being responded to by some celebrated mayors, voted in to satisfy residents’ tastes and demand for more productivity and consequent consumption.
But the irony is that in the face of ecological catastrophe, the cities need to dematerialize rather than consolidate material consumption.
In sum, the challenge is how to grow “within” the environment, not “in balance” with it. If we need a new law at all, it would need to encourage asset-based development that develops within and enriches existing assets, not based on investments that are footloose and which degrade available urban assets. It needs to reorient the whole urban system towards sustainability, to facilitate businesses and citizens to produce and consume wisely. If we are serious about that as a necessity, we do need a new law. A good, well-deliberated and visionary one.