Suburbanization in Asia: A focus in Jakarta

This post is one of the chapters in the book titled "The Routledge Companion to the Suburbs" edited by Bernadette Hanlon and Thomas J. Vicino. The book was published by the Routledge in September 2018. You can find the book in the Routledge link here. The chapter on Jakarta was written by Fikri Zul Fahmi, Tommy Firman and myself. Tommy Firman is  professor of Regional Planning at the Bandung Institute of Technology and Fikri Zul Fahmi is assistant professor of Urban and Regional Planning at the Bandung Institute of Technology, Indonesia.

Suburbanization in Asia: A focus in Jakarta

By Deden Rukmana, Fikri Zul Fahmi and Tommy Firman

Introduction

Jakarta is the capital of Indonesia and the largest metropolitan area in Southeast Asia with tremendous population growth, land use change and new town and industrial estate development. The overall population of the Jakarta region grew in the 20th Century, from about 150,000 in 1900 to about 30 million in 2014. The metropolitan region of Jakarta is also called Jabodetabek, taken from the initial letters of the administrative units of Jakarta, Bogor, Depok, Tangerang and Bekasi.  The center of Jabodetabek is Jakarta, also called the Special Capital Region of Jakarta (Daerah Khusus Ibukota Jakarta) and covers a total area of 664 square kilometers. The inner peripheries of the metropolitan region of Jakarta include four municipalities (City of Tangerang, City of South Tangerang, City of Depok, City of Bekasi), whereas the outer peripheries of Jabodetabek include the City of Bogor, Tangerang Regency and Bekasi Regency. The metropolitan region of Jakarta covers a total area of 5,897 square kilometers (Hudalah and Firman 20011).

Jakarta, or the Special Capital Region of Jakarta, has ‘provincial government level’ status. The peripheries of Jabodetabek are within the jurisdiction of two provinces.  The City of Bogor, City of Depok, City of Bekasi and Bekasi Regency are within the jurisdiction of West Java Province, whereas the City of Tangerang, City of South Tangerang and Tangerang Regency are within the jurisdiction of Banten Province. The four municipalities within the inner peripheries of Jabodetabek are new municipalities founded in the 1990s and 2000s. The City of Tangerang, City of Bekasi, City of Depok and City of South Tangerang were founded in 1993, 1996, 1999 and 2008 respectively. The City of Tangerang and City of South Tangerang seceded from Tangerang Regency. Meanwhile, the City of Depok was part of Bogor Regency and the City of Bekasi seceded from Bekasi Regency.

            This chapter will examine the extent to which the Jakarta region has transformed from a concentric and radial pattern urban structure to an early stage of post-suburbanization with an emerging fragmented structure of peripheral areas. The evolution of new towns and industrial estates in the peripheries of the Jakarta region will be discussed. The chapter will focus on the nature of suburban growth in the Jakarta region and the policies and plans to contain or influence patterns of the suburbanization. 

Population Growth of the Metropolitan Region of Jakarta

Jakarta has been the capital of Indonesia since the Dutch colonial era. The population of Jakarta in 1900 was about 115,000. In the first nationwide census of the Dutch colonial administration (1930), Jakarta’s population increased to 409,475. In the next ten years, the population increased to 544,823 with an annual growth rate of 3.30%. After Independence, Jakarta increased by nearly three times to 1.43 million by 1950. It increased to 2.91 million in 1960 and 4.47 million in 1970. The annual growth rates of Jakarta’s population are 10.35% and 5.36% (1950-1960 and 1960-1970 respectively).

            Table 1 shows the population of the metropolitan region of Jakarta including Jakarta, the inner and outer peripheries of Jakarta, from 1980 to 2010. The Megacity of Jakarta increased from 11.91 million in 1980, 17.14 million in 1990, and 20.63 million in 2000 to 28.01 million in 2010. The megacity in 2010 was 11.79 percent of Indonesia’s total population but this population resides in less than 0.3 percent of Indonesia’s total area. The proportions of Jabodetabek’s population to the total population of Indonesia have steadily increased from 8.07%, 9.56%, to 10.0% (in 1980, 1990, and 2000 respectively).   

Table 1

Population of the Metropolitan Region of Jakarta in 1980-2010

(in millions)

Area	1980	1990	2000	2010
Core	6.50	8.26	8.39	9.60
Jakarta	6.50	8.26	8.39	9.60
Inner peripheries	n.a	n.a	4.93	7.22
City of Tangerang	n.a	n.a	1.33	1.80
City of South Tangerang	n.a	n.a	0.80	1.29
City of Depok	n.a	n.a	1.14	1.75
City of Bekasi	n.a	n.a	1.66	2.38
Outer peripheries	5.41	8.88	7.31	11.20
City of Bogor	0.25	0.27	0.75	0.95
Tangerang Regency	1.53	2.77	2.02	2.84
Bekasi Regency	1.14	2.10	1.62	2.63
Bogor Regency	2.49	3.74	2.92	4.78
Megacity of Jakarta	11.91	17.14	20.63	28.02

                                Sources: Rukmana (2014)

Transformation of Jakarta

The modern city of Jakarta was initiated by President Soekarno’s strong vision to build Jakarta into the greatest city possible (Cybriwsky and Ford, 2001). He gave Jakarta, Monas – his most symbolic new structure the 132 m high national monument, spacious new government buildings, department stores, shopping plazas, hotels, the sport facilities of Senayan that were used for the 1962 Asian Games, the biggest and most glorious mosque of Istiqlal, new parliament buildings and the waterfront recreation area at Ancol.

Such constructions continued under the New Order regime that began in 1967. Under this regime, Indonesia enjoyed steady economic growth, along with a reduction in the percentage of the population living under the poverty line. Jakarta grew rapidly during this period of the New Order regime. The investment in the property sector, including offices, commercial buildings, new town development, and highrise apartments and hotels grew substantially. Jakarta, by the mid-1990s, was heading towards global city status. Jakarta was the largest concentration of foreign and domestic investment in Indonesia and received US$ 32.5 billion and Rp. 68,500 billion from foreign and domestic investment respectively during the period of January 1967-March 1998 (Firman 1999).

In the early administration of the New Order regime, some projects were completed, including the Ismail Marzuki Arts Center, industrial zones at Tanjung Priok and Pulo Gadung, that aimed to attract foreign investment, plus the unique theme park of Taman Mini Indonesia Indah. During the thirty-two years of the New Order regime, Jakarta changed considerably. A generally rapid economic growth during this period allowed Jakarta to expand its modern constructions and develop into a modern city. Hundreds of new office towers, hotels and high-rise condominiums were built in many parts of the city.

The Golden Triangle – a new style commercial zone - was built in Thamrin-Sudirman corridor to push the urban skyline upward in response to high land costs in key areas and the convenience of the automobile (Cybriwsky and Ford, 2001). This zone aimed to accommodate internationally invested highrise mega-blocks; a result of the regional competition among “global cities” (Firman, 1998; Goldblum and Wong, 2000). Jakarta is linked with other “global cities” in a functional system built around telecommunications, transportation, services and finance. A parade of tall buildings, one after the other filled the major streets on both sides. They housed the offices of Indonesian and multi-national corporations.

The economy crisis which hit Indonesia in 1998 resulted in major disruptions of the urban development in Jakarta. Such monstrous crisis shifted Jakarta from “global city” to “city of crisis”. The crisis – commonly known in Indonesia as krismon - largely squeezed the economy of Jakarta. In order to survive the krismon, a large number of workers shifted to become food traders or then engaged in other informal sector jobs. Street vendors –commonly known in Indonesia as pedagang kaki lima- increased rapidly from about 95,000 in 1997 to 270,000 in 1999 (Firman, 1999).

This shrinkage of economic activities resulted in the decrease of office space demand which dropped from 300,000 square meters in 1997 to 85,000 square meters in 1999. Similarly, the demand for high-class apartments dropped from 49,000 in December 1997, to 16,000 in February 1998. The housing market in the megacity nearly collapsed due to increasing costs of building materials and higher housing loan interest rates. Most construction projects in the periphery of Jakarta slowed down or even completely stopped (Firman, 2004).

In order to mitigate the impact of the krismon, in July 1998 the government along with the assistance of IMF launched a variety of social safety net programs. Political and economic reforms were also implemented during the recovery process. Civil unrest and political uncertainty heightened during the krismon gradually lowered during the recovery process.

As of early 2005, Indonesia’s economic performance was more positive. The rate of economic growth of Indonesia was 5.73% per year over the period of 2004-2008. The positive Indonesia’s economic growth resulted in an increased number of construction projects in Jakarta including malls, apartments and office buildings. Winarso (2010) reported twelve malls and shopping centers in Jakarta built between 2004 and 2006 including Pondok Indah Mall, Jakarta City Center, Senayan City, Cityloft Retail, Grand Indonesia, Pacific Place, Pasar Senen, Plaza Indonesia, Blok M Square, Shopping Center Gandaria, Kemang Village and Kota Casablanca. The land area of malls in Jakarta increased from 1.7 million square meters in 2000 to 4.8 million square meters in 2009 (Suryadjaja 2012). Another seven malls were built between 2013 and 2016 including Cipinang Indah Mall, The Baywalk Green Bay Pluit, St. Moritz, Mall at the City Centre, The Gateway, Pantai Indah Kapuk Mall and Pondok Indah Mall 3.

Jakarta has held strong domination in Indonesia’s economy since the colonial era (Salim and Kombaitan 2009). Jakarta has been the most attractive area for both domestic and foreign investments in Indonesia. Nearly one-fourth of total approved foreign investment in Indonesia over the period of 2000-2005 was in Jakarta due to Jakarta’s high concentration of skilled labor and entrepreneurs (Firman 2008).

Jakarta's contribution to Indonesia's GDP in 2010 increased to 16.7% from 14.9% in 2000. The staggering Jakarta's contribution to Indonesia's economy was primarily caused by the dominance of Jakarta in the financial and business sector. The high economic growth of Jakarta also pulled more people to move to Jakarta. Kenichiro (2015) identified that coming back to the city as a new trend after the krismon. Such a trend was indicated by the population growth of Jakarta over the period of 2000-2010 that was higher than that of the period of 1990-2000.

Since 2005, Jakarta witnessed the construction of luxury high-rise apartments in many parts of Jakarta. The investors of luxury high-rise apartments also came from several Asian countries including China, Singapore, Hongkong and Japan (Colliers International 2017). The cumulative supply of luxury apartments in Jakarta reached more than 100,000 units by 2012 (Kenichiro 2015). The luxury apartment market in Jakarta has been strong in the last decade. In the first four months of 2017 alone, a total of 2,790 units of luxury high-rise apartments have been completed in three projects including Nerine Tower, Elpis Residence and Paradise Mansion (Colliers International 2017).  

According to the Council on Tall Buildings and Urban Habitat, Jakarta has a total of 377 tall buildings with the minimum height of 100 meters by 2017. Jakarta ranks twelfth among cities in the world for the number of tall buildings (CTBUH 2017). Jakarta has a strong trend for vertical urbanism marked by the construction of numerous high-rise buildings (Alexander et al 2016). A total of 66 high-rise buildings are still under construction and being proposed in Jakarta including the Signature Tower that will become the Jakarta’s tallest building in 2022.  

Jakarta has experienced a tremendous population growth and faced a wide range of urban problems in the last few decades. Two major problems of Jakarta are traffic congestions and floods. The urbanization and suburbanization in Jakarta are strongly associated with the traffic congestion in Jakarta. Jakarta is estimated to lose US$3.5 billion a year because of traffic congestion which can’t be separated from the high growth rate of vehicle ownership (Wismadi et al 2013). Jakarta heavily relies on road transportation and about 80% of trips made by private vehicles (Sugiarto et al 2015).

According to the Jakarta’s Bureau of Statistics (2016), nearly three quarter (74.66%) of vehicles in Jakarta in 2014 was motorcycles. The number of motorcycles increased at a rate of 13.35% per year from 6.76 million in 2008 to 13.08 million in 2014. The number of passenger cars increased at a rate of 8.65% per year from 2.03 million in 2008 to 3.27 million in 2014. Over the same period, the total road length in Jakarta increased at a rate of 0.90% per year.

Several programs have been implemented to alleviate the acute traffic congestions in Jakarta including the expansion of inner-city toll road and the development of Bus Rapid Transit (BRT) and Mass Rapid Transit (MRT). The total length of inner-city toll road in Jakarta increased from 112.9 kilometers in 2008 to 123.73 kilometers in 2014. The BRT or popularly known as TransJakarta was introduced in 2004 and the service of TransJakarta had been expanded to 12 corridors with a total of 669 buses by 2014. The total number of passengers of the bus rapid transit in 2014 was 111.6 million.

 For at least 20 years, the proposed MRT has been under discussion by the Jakarta administration and the government of Indonesia. Activists and non-governmental watchdogs have seen the MRT proposal as a possible bonanza for corrupt politicians and contractors. Eventually, the government secured a $1.6 billion loan agreement with the Japanese International Cooperation Agency (JICA) in 2009 for funding. The construction of the MRT project began on October 10, 2013. The first MRT tract will connect Lebak Bulus, South Jakarta and the Hotel Indonesia traffic circle with six underground stations, seven elevated stations and a capacity of 173,000 passengers per day (Rukmana 2014). By June 30, 2017, the completion of the MRT first tract was nearly 75 percent. The Jakarta city administration expected to launch the service of MRT to the public for trial purposes in August 2018.

Jakarta lies in a lowland area with 13 rivers. All tributaries and basin areas of these 13 rivers are located in the peripheries of the megacity, strongly associated with the floods in Jakarta. Industrial parks and new towns were built in the peripheries of Jakarta and many of them have converted water catchment areas, green areas and wetlands. Such land conversions have affected the severity of flooding in Jakarta. Floods have become a threat and bring increasing woes for Jakarta residents every year.

Flooding has had critical impact on the infrastructure and population of Jakarta. In 2008, floods inundated most parts of Jakarta including the Sedyatmo toll road; and nearly 1,000 flights in the Soekarno-Hatta International Airport were delayed or diverted while 259 were cancelled. In 2012, floods submerged hundreds of homes along major Jakarta waterways, including the Ciliwung, Pesanggrahan, Angke and Krukut rivers, and displaced 2,430 people. In January 2013, many parts of Jakarta were inundated following heavy rain; and, as reported by the National Disaster Mitigation Agency (BNPB), the ensuing floods killed at least 20 people and sent at least 33,502 fleeing their homes (Rukmana 2014)

In the aftermath of these annual floods, the government normally attempts to dredge the rivers and release floodwater as quickly as possible into the sea via the East Flood Canal. Construction of the East Flood Canal began in the aftermath of major floods in 2002, and reached the sea on December 31, 2009 after very slow progress due to the complicated land acquisitions. The East Flood Canal has been considered the most feasible means to prevent future flooding in Jakarta, but clearly cannot prevent flooding entirely.

New Towns and Industrial Estates in the Suburbs of Jakarta

In order to understand the suburbanization in the metropolitan region of Jakarta, it is essential to recognize the socio-economic dualism pervading Indonesian urban society. The manifestations of this dualism are the presence of the modern city and the kampung city in urban areas. The kampung, ‘village’ in Indonesian, is associated with informality, poverty, and the retention of rural traditions within an urban setting. Firman (1999) argues the existence of kampungs and modern cities reflect spatial segregation and socio-economic disparities.

The growing numbers of migrants to Jakarta and poor Jakarta natives have produced new squatter kampungs on the periphery of Jakarta (Cybriwsky and Ford, 2001). Many constructions in the central city also caused some residents of kampungs to be evicted and relocated to the periphery (Silver, 2007). The periphery also attracted migrants because of its improved infrastructures and facilities in (Goldblum and Wong, 2000). Since 1950, Jakarta has attracted people from all parts of Java and other Indonesian islands. The flood of migrants came to Jakarta for economic reasons as Jakarta offered the hope of employment.

Starting in the early 1980s, agricultural areas and forests in the suburbs of Jakarta were converted massively into large-scale subdivisions and new towns (Silver 2008). Over the period of 1990 and 2010, more than 30 new large new towns were built in the suburbs of Jakarta ranging from 500 hectares to 30,000 hectares. They converted more thousands hectares of rural land (Firman 2014; Winarso and Firman 2002)

The massive development in the suburbs of Jakarta was a result of a series of deregulation and de-bureaucratization measures enacted by the Suharto government in the 1980s (Winarso and Firman 2002). The subsidized housing finance program and municipal permit system for land development also contributed to the massive development in the area. These policies have most benefited some developers that were strongly linked with the New Order regime (Leaf, 1994).

The residential enclave for narrowly targeted moderate and high-income families characterized Jakarta’s suburban area (Firman, 1998; Leaf, 1994). Located on the periphery of the city, these settlements were built in automobile-accessible areas with various high-quality amenities such as modern golf courses. High-income families in the central city also moved from the city in search of better living quality (Goldblum and Wong, 2000). The high cost of houses and the need for automobiles restricted low-income families from the suburban housing market. One in five families in Jakarta’s suburbs owned an automobile (Leaf, 1994).

The first new town in the suburbs of Jakarta is a collaborative project of Bumi Serpong Damai in the early 1980s. This first new town was planned for an eventual population of 600,000 in a total area of 6,000 hectares; a project developed by several private developers and led by the largest private developer – the Ciputra Group. Other new towns in the suburbs of Jakarta include Bukit Jonggol Asri, Bukit Sentul, Pembangunan Jaya, Lippo City, Cikarang Baru, Tigaraksa, Kota Legenda, Kota Cileungsi, Royal Sentul, Bintaro Jaya, Lido Lakes Resort, Gading Serpong, Modernland, Kota Wisata Teluk Naga, Kota Modern, Kota Citra Raya and Alam Sutera dan Kedaton (Firman 1998; Silver 2007; Winarso 2010).

New towns in the suburbs of Jakarta are aimed at middle-upper income groups (Goldblum and Wong 2000; Firman 2004). They are mostly furnished with golf courses, shopping malls, cinemas, hospitals and hotels. The design of new towns was influenced by American design concepts to offer luxury, secured and self-sufficient neighborhoods and improved lifestyles. Many new towns also led to large scale displacement of farmers and existing residents such as Tigaraksa that evicted about 1,400 farmers (Firman 2004).

In a number of these new towns, the State Housing Provider Agency (Perumnas) joined with private developers to assure some housing was targeted for low and moderate-income families (Cybriwsky and Ford, 2001). Most of the new towns offered relatively few employment opportunities. Their initial concept was to create self-contained communities but this was barely implemented. Instead, the new towns became “bedroom suburbs for city-bound commuters” (Cybriwsky and Ford, 2001). The new towns were still heavily dependent on the central city (Firman, 1999; Silver 2007) and the development of large-scale housing projects intensified the daily interaction between the fringe areas and the central city of Jakarta. This worsened the traffic problems in metropolitan Jakarta.

People who live in the outskirts of Jakarta can save as much as 30% of their transportation costs using motorcycles to work rather than public transport. Motorcycles are ubiquitous and can be acquired with a down payment of as little as $30. The daily jams in Jakarta are getting worse; the peripheries are a “bedroom suburb” for the daily commuters of Jakarta, the center of government and corporate offices, commercial and entertainment enterprises. Commuters from the peripheries primarily used three highways including the Jagorawi toll road connecting Jakarta and the southern peripheries, the Jakarta-Cikampek toll road connecting Jakarta and the eastern peripheries and the Jakarta-Merak toll road connecting Jakarta and the western peripheries. The economy of Jakarta dominates its peripheral areas. In the daytime, the total population in Jakarta is much more than its population in the nighttime; the number of daily commuters in Jakarta is estimated 5.4 million.

Winarso and Firman (2002) revealed almost all large developers were well connected to the President Suharto’s family and inner circle including his daughters, sons, brother, in-laws and close friends. The connection to the Suharto family and inner circle became significant; closeness to the first family helped the large developers expand their business. Interlinking also occurred among the large developers through cross-shareholding, shared directorships and joint ventures; process which turned potential competitors into collaborators and created oligopolistic types of land and housing markets.

In addition to residential zones, the periphery of Jakarta is also made up of specialized zones of commercial and industrial enterprises. These areas complement the other districts of Jakarta: the central business districts on Thamrin-Sudirman corridor, the government offices around Medan Merdeka, the international seaport of Tanjung Priok, and the growing network of freeways. The development of industrial zones in the peripheries of Jakarta also indicated a spatial restructuring that shifted manufacturing from the central city to the periphery. Firman (1998) reported that the central city attracted disproportionate investment in service industries, trade and hotel, and restaurant construction.

The peripheries attracted most of the industrial construction; these include textiles, apparel, footwear, plastics, chemicals, electronics, metal products and foods (Cybriwsky and Ford, 2001). The total area of industrial estates in the suburbs of Jakarta region increased from 11,000 hectares in 2005 to 18,000 hectares in 2010 (Firman 2014; Hudalah 2013). About 40% of the industrial estates in the region were located in the district of Bekasi including seven large industrial estates: Bekasi Fajar Industrial Estate, East Jakarta Industrial Park, Bekasi International Industrial Estate, MM 2100 Industrial Estate, Jababeka, Lippo Cikarang and Pembangunan Deltamas.

Three industrial estates in the district of Bekasi (Jababeka, Lippo Cikarang and Pembangunan Deltamas) also integrated their industrial areas with residential and other urban activities. They created towns rather than estates (Hudalah and Firman 2012). Jababeka also built an inland port named Cikarang Dry Port and opened it in 2010. The Cikarang Dry Port offers a one stop service for cargo handling for international export and import and domestic distribution.

The large seven industrial estates in the district of Bekasi is Indonesia’s largest industrial concentration. They produced about 46% of the national non-oil and gas export of USD 66.428 billion in 2005 (Hudalah and Firman 2012). The industrial activities in the district of Bekasi also generated taxes for the central and local governments as much as 3.4-6 trillion rupiahs in 2005. Nearly 10,000 expatriates also lived in the district of Bekasi in 2005 due to the industrial activities.

The development of private industrial parks in the peripheries followed the development of the three highways stretching from Jakarta to the peripheries - the Jagorawi toll road, the Jakarta-Cikampek toll road, and the Jakarta-Merak toll road highways (Henderson and Kuncoro 1996; Hudalah et al 2013).  Private industrial parks in the peripheries range from 50 to 1,800 hectares and on average the size is about 500 hectares (Hudalah et al 2013); major industrial centers are located in Cikupa-Balaraja of Tangerang Regency and Cikarang of Bekasi Regency. The industrial center of Cikarang with a total industrial land area of nearly 6,000 hectares is the largest planned industrial center in Southeast Asia (Hudalah and Firman 2012).

The industrial estate in the suburbs of Jakarta region are becoming increasingly specialized and intensifying the trend for the region to become more polycentric (Firman 2014; Hudalah et al 2013). Each industrial estate built its own facilities and infrastructure including roads, waste treatment plants and communication network and resulted in a fragmented industrial complex (Hudalah et al 2013).

Post-suburbanization of Jakarta

Urban development in metropolitan Jakarta has continued and expanded beyond the suburbs. Jabodetabek fringe areas, that used to be ‘traditional’ dormitory towns, have transformed into more independent areas with a strong economic base. Agricultural land in these areas have converted into various urban land uses, including new town and large-scale residential areas, industrial estates and shopping centers. The core of the metropolitan region, Jakarta City, in contrast is experiencing low population growth due to considerable population spillover to fringe areas. While population growth in Jakarta City was 3.1% between 1980 and 1990, it was only 1.5% between 2000 and 2010 (see also Table 1). As a result of new town and industrial development in fringe areas, commuting is evident in Jabodetabek, in which millions of people commute between the Jakarta City and the peripheral areas daily by trains, buses and personal cars. Likewise, a number of the Jakarta City inhabitants commute between the city and small and new towns in the outskirts, including Bogor, Tangerang, Bekasi, Depok and Jababeka, as they work there but still live in Jakarta (Firman 2011).

As Firman and Fahmi (2017) explain, recent Jabodetabek development reflects some signs of the early stages of post-suburbanization. Post-suburban development in Jabodetabek is, however, less likely to fully resemble that of Western cities (Feng et al. 2008) “because so many people choose to continue to live in the traditional core and commute out to suburban developments for work, as well as other activities” (Firman and Fahmi 2017, p. 77). Post-suburbanization in Jabodetabek is triggered by privatization of land development and management particularly in fringe areas. The private sector has gained stronger control over land, in that it can aggressively acquire, develop and manage land in fringe areas, most notably for residential and industrial activities. The prominent role of the private sector in land development has indeed materialized for a long time. Currently, the private sector plays a more significant role: it is able to direct land development and manage the areas ‘exclusively’ by providing municipal services traditionally delivered by local governments in the areas.

The shift of power from the public to the private sector in land development is strongly driven by decentralization and its associated reforms in Indonesia. For the Jabodetabek case, the central government still plays a strong role in suburban development, in that many industrial activities in fringe areas are made possible by foreign direct investments, which are subject to the central government’s approval.  On the other side, local governments now have the authority to direct spatial plans and the development in their areas, as well as to grant building permits to private developers.

Industrial centers in Jabodetabek are increasingly becoming diversified, so that fringe areas are becoming a more polycentric and a fragmented industrial region (Hudalah et al. 2013). This development can be associated with the behavior of private developers, both foreign and domestic origins, who seek economic benefits from the ongoing industrialization processes as well as the pro-growth economic policies of both central and local governments. The central government has stimulated the development of industrial estates in fringe areas by subsidizing the provision of infrastructure and other facilities built and managed by ‘licensed companies’ (Hudalah et al. 2013). According to Government Regulation 142/2015, the licensed companies, those holding permits from either central or local government, have the exclusive right to develop and manage specific industrial areas, provide and manage ongoing utilities and facilities exclusively for the firms that locate in these areas. The license to develop and manage industrial parks is to be granted by the local government where the potential estates are located and by the provincial government if the potential location extends into two or more municipalities/districts. If the potential area extends over two or more bordering provinces, or if it is to be operated by a foreign company, the developer must acquire additional permits from the central government. After a private developer obtains the license to manage industrial park, it has the exclusive authority to sell land units to other companies that wish to start businesses inside the industrial estates.

The shift of power from the public to the private sector is also reflected in new town development in fringe areas. Private developers expansively build new town and large scale residential projects in response to the local needs driven by economic growth and diversification in fringe areas. They gain permits from the local governments to design the new towns as gated suburban communities, which are surrounded by walls and separated from nearby local communities (Leisch 2002). Private developers not only provide infrastructure exclusive to the inhabitants within the communities, but also administer municipal services as if they were the ‘government’ in the communities. In so doing, they appoint their own ‘city’ managers to ensure service delivery and security of the area. Local governments enable this development by granting building permits to private developers, although these sometimes do not comply with the legalized spatial plans. For example, new town projects are built on land that is supposed to be catchment areas. The local autonomy rights given to the local governments have cultivated a competitive climate, so that they are now eager to promote economic development in their regions and exploit regional resources more intensively. In many cases, economic growth is preferred over enforcing spatial plans (Rukmana 2015). Decentralization has also intensified the practice of ‘clientelism’, or patronage relationships, between the local government and the private sector (Rukmana 2015). Spatial plans are often prepared, and easily altered, to accommodate the interest of developers rather than to plan for more sustainable regions (Firman 2004, Rukmana 2015). Driven by political pressures and interests in placing what are perceived to be profitable economic activities, spatial plans are often negotiated and violated.  This condition actually illustrates contradictory facts. On the one hand, local governments have strong power to direct local development and also to empower developers to perform their profit seeking behaviors, although this violates the spatial plans (Cowherd 2005, Kenichiro 2015). On the other hand, this reflects the inadequacy of local government capacity to enforce the legalized plans, as if they were ‘powerless’ when they have to face the developers.

The fact that the private sector takes over some governmental tasks, on the one hand, can be seen as an opportunity to fulfill the limited capacity of local governments to provide basic services. On the other hand, the private sector focuses mainly on making profits and often pays less attention to the spatial plans that aim at creating sustainable cities and regions. As local governments have the authority to direct local development and the central government has less power to intervene it, the making and enforcement of spatial plans in Greater Jakarta has been fragmented (see Kusno 2014). As such, recent post-suburbanization of Jakarta reveals new, significant challenges in managing urban development and enforcing spatial plans, which require innovative governance solutions.

Conclusion

This chapter has presented the transformation of Jakarta from a concentric and radial pattern urban structure to an early stage of post-suburbanization. Jakarta has been the national capital and the largest city in Indonesia since the Dutch colonial era, although before Independence Jakarta was relatively far smaller (under one million inhabitants). After Independence, Jakarta started to grow beyond the city boundary and formed a metropolitan region consisting of several administrative districts and municipalities (Jabodetabek). In the New Order (1967-1998), as the country enjoyed a rapid economic growth, Jakarta had a chance to expand its constructions and develop into a modern city. Further, the central government’s pro-growth economic policy at that time supported big scale industrial activities in the peripheries of Greater Jakarta. Although the monetary crisis made a development pause in the beginning of the New Millennium, the development in Greater Jakarta has continued. The current development indicates some signs of the early stages of post-suburbanization, in which the traditional core remains preeminent, but the peripheral areas have become more independent satellite cities with strong economic base and diversified activities.

This development is triggered by privatization of land development and management particularly in fringe areas (Firman and Fahmi 2017). The private sector has indeed played a crucial role in developing industrial and large residential activities in fringe areas. However, it now plays an even more significant role as it can direct land development and manage the areas ‘exclusively’ by providing municipal services traditionally delivered by local governments in the areas. As the result, regional development of Greater Jakarta, which consists of several districts and municipalities, is potentially even more fragmented and unsustainable. A forum, namely the Coordinating Body of Jabodetabek Development, is supposed to integrate local government actions in managing the development in the region. However, this body seems ineffective, as under the Indonesian New Decentralization law the real authority of local development is owned by the local government. This condition suggests that it is now crucial to designate a form of Metropolitan Authority which works above the local government level and is authorized to coordinate the development in the region.

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