Cities and Metropolitan Areas are Development Blessings

KOMPAS/RADITYA HELABUMI

Bambang PS Brodjonegoro

Don\'t ever think that urbanization is a burden. On the contrary, urbanization has the potential to drive economic growth toward prosperity as long as it is managed properly.

Urbanization occurs because of increases in population and the need for activities and facilities for life that are more varied and in greater number. Urbanization can have a positive impact on the development of a country toward a strong and stable economy and social structure because the urban economy is largely based on the industrial and service sectors that provide greater added value to the economy.

However, a World Bank study on Indonesia, the Urbanization Flagship Report (2019), shows that 1 percent of urbanization growth in Indonesia is only able to drive an increase in GDP per capita of 1.4 percent. In fact, in other countries with similar population growth characteristics, such as China, urbanization can increase GDP per capita by 3 percent and in other countries in East Asia Pacific by 2.7 percent.

The issue of urbanization in Indonesia

Urban indicators in Indonesia are also left behind by neighboring countries. Based on the 2018 SDGs Index and Dashboard Report released by the Sustainable Development Solution Network, Indonesia ranked 107th out of 156 countries. This index uses indicators, including air quality, access to drinking water, public transportation systems and access to housing. Furthermore, according to 2015 WHO/Unicef Joint Monitoring Program data, Indonesia ranked 131st for access to drinking water and 133rd for access to improved sanitation from a total of 190 countries. Indonesia is still far behind Singapore, Malaysia and Thailand, which have entered the top 100 in the world, and is even below the Philippines.

In 2018, only 61.29 percent of households had access to safe drinking water and only 20.14 percent had access to tap water. For sanitation, the percentage of households with access to proper sanitation reached 69.27 percent, with only 13 regencies/cities having domestic wastewater treatment plants at a municipal scale. Up to 9.36 percent, or 26.2 million, Indonesian people defecated carelessly, 5.9 million of whom were urban residents. The lack of access to drinking water and sanitation reduces the quality of public health, particularly by causing growth and development disorders in children, as seen from the fact that 27.5 percent of children under 5 in 2018 suffered from stunting.

Problems in urban areas that have become metropolitan areas, such as Jakarta and its surroundings, are more complex because their cross-administrative condition is often not integrated. This makes services inefficient. Fulfillment of urban services in metropolitan areas should be supported by integrated management with effective institutions, not only based on the needs of the administrative areas, but also the optimal functional needs of a broad and interrelated territory.

The Jabodetabek urban area is one example of a metropolitan area the covers 2 provinces, 7 regencies/cities and 185 districts.

Urban areas in Indonesia consist of administrative cities and functional urban areas. Administrative cities are divided based on the size of the population: small cities, medium cities and large cities. By definition, a small city has a population of less than 500,000 people, a medium city 500,000 to 1 million people, and a large city more than 1 million people. Functional urban areas consist of urban areas and metropolitan areas. Urban areas are usually within a regency and within the administrative boundaries of a district, while a metropolitan area generally consists of two or more provincial, regency/city, or district administrative areas. The Jabodetabek urban area is one example of a metropolitan area the covers 2 provinces, 7 regencies/cities and 185 districts.

Many variations of the metropolitan boundary method are used in various countries, but generally population density data per square kilometer is used to determine the central area and daily commuter data from surrounding areas into the central area for determining the functional metropolitan areas. In various countries, after metropolitan boundaries are established, statistical data are collected as a basis for integrated metropolitan planning. The data is no longer published separately according to administrative regions, but per metropolitan area, known as the metropolitan statistical area. Moreover, in the era of digital technology, metropolitan statistical area development can take advantage of the availability of big data. Big data on urban services such as electricity bills, drinking water bills and electronic IDs need to be collected as a database for the development of better urban services.

Sustainable cities

If planned and managed properly, urbanization can be an effective tool for sustainable development. Global mandates such as the Sustainable Development Goals 2030 and the New Urban Agenda have identified this potential, but a good translation is needed so that it can be adapted to the characteristics of cities in Indonesia.

Currently the National Urban Policy (KPN) is compiled by adopting the global mandate as stated in the Sustainable Development Goals (SDGs). The SDGs have established Goal 11, which includes: (a) decent, safe and affordable housing and basic service infrastructure; (b) improvement of the quality of slums; (c) a decent and affordable transportation system; (d) integrated, inclusive and sustainable urbanization; (e) urban-rural linkages; (f) mitigation and adaptation to climate change; (g) disaster risk reduction. The National Urban Policy has also adopted various SDGs indicators related to urban areas.

The five missions are translated into activities carried out by various parties, not only the government. To realize this, integration of planning, budgeting and financing is needed.

The National Urban Policy establishes five missions: (a) encouraging an integrated, balanced, prosperous and just national urban system; (b) realizing livable, inclusive and cultured cities; (c) realizing developed and prosperous cities; (d) creating green and resilient cities; and (e) encouraging collaborative, transparent and accountable urban governance. The five missions are translated into activities carried out by various parties, not only the government. To realize this, integration of planning, budgeting and financing is needed.

Referring to the five missions and long-term urban or metropolitan spatial planning, local governments are expected to develop medium-term priority activities that are complemented by potential financing schemes so as to produce an investment plan that is incorporated into every sustainable five-year development plan (RPJMD).

Urban development, especially metropolitan areas, in the future needs to consider land/natural resource/energy efficiency. The concept of compact cities with mixed-use areas connected to public transportation needs to be deepened and developed in Indonesia. The two concepts enable urban land-saving and energy-efficient cities that prioritize residences that are integrated with business centers. This mixed area makes it easy for residents to move by using non-motorized modes of transport: bicycles or on foot. To reach farther away places, reliable public transportation is available.

The development of sustainable metropolitan areas also requires an effective institutional design that is able to integrate urban planning and development across administrations within metropolitan areas. The big challenge in this era of decentralization is cooperation within the metropolitan areas that are limited by decentralization rules. Decentralization divides the largest administrative authority at the city/regency level and divides functions clearly among sectors.

The design of the management agency for each metropolitan area cannot be uniform, as it requires political, social and fiscal capacity considerations. Proposed metropolitan institutional forms that can be used as benchmarks include inter-city forums, metropolitan/regional authorities, two-tier metropolitan/local governments and regional government consolidation.

Recognizing the magnitude of funding for developing sustainable urban and metropolitan areas, innovative alternative financing schemes need to be developed. The ability to identify alternative financing schemes for urban development is an expertise that must be mastered by local governments. That capability includes identifying suitable activities to be funded by public and private partnerships, regional bonds, BUMN/BUMD investments and private business entities, the use of zakat-infak-wakaf to increase the welfare of mustahik or bank loans. For example, flats have now been built on wakaf (endowment) land aimed at mustahik, which need them to reduce the development of informal settlements. This financing scheme is a model implemented under the financing system regulated by Law No. 41/2004 on wakaf and Law No. 20/2011 concerning affordable flats.

Follow-up

To face the challenges of urbanization and the realization of sustainable cities, the government continues to be committed to developing national urban policies that are in line with the SDGs to realize the Sustainable Urban Vision 2045. As an initial stage, in the 2020-2024 National Medium-Term Development Plan (RPJMN), the government will establish and direct the development of several large cities and metropolitan areas outside Java as a priority. One of them is the plan to relocate the capital city to East Kalimantan in order to better distribute development between Java and other large islands.

With a more detailed map scale than the RTRW, the RDTR can be used as a reference for compiling an Urban Investment Plan integrated into the RPJMD. RDTR can be a tool for controlling urban development so that it remains well ordered.

To strengthen urban planning, the government continues to ensure integration between spatial planning and development planning. Spatial planning does not stop at the regional spatial plan (RTRW), as detailed spatial planning (RDTR) is the main prerequisite for urban development. With a more detailed map scale than the RTRW, the RDTR can be used as a reference for compiling an Urban Investment Plan integrated into the RPJMD. RDTR can be a tool for controlling urban development so that it remains well ordered.

In the midst of Indonesia\'s efforts to realize this goal, the government\'s financial contribution to development accounts only for 20 percent of the total needs. Therefore, cooperation with all parties is needed to accelerate urban development, which must be properly planned and continue to be guided by sustainable principles so that urban and metropolitan growth becomes a blessing for development and improves the welfare of the citizens.

Bambang PS Brodjonegoro, National Development Planning Minister/Head of the National Development Planning Agency (Bappenas)