Transformation of Jakarta

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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 mi

llion 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.

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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:

1. Deden Rukmana, 
2. Fikri Zul Fahmi and 
3. Tommy Firman

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