Contesting the centrality of Jakarta Have industrial parks promoted deconcentration?

Delik Hudalah School of Architecture, Planning, and Policy Development, Institut Teknologi Bandung Email: d.hudalah@sappk.itb.ac.id Website: http://www.sappk.itb.ac.id/pwd/index.php/en/staff/dh

Forum Komunikasi Pembangunan, Jakarta, 7 March 2013

From population towards employment

• Jakarta is the most suburbanized mega-city in South East Asia.

• While population deconcentration is well documented, little attention paid to the role of industrial restructuring in shaping this suburbanization trend.

• Following pro-market development policies of the 1980s, industrial park and town projects have grown rapidly in the suburbs to anticipate massive inflows of FDI.

• Have manufacturing industries in Greater Jakarta deconcentrated? How have the metropolitan structure been reshaped? What would be the implications for the planning of the metropolitan area?

Deconcentration (1)

• (Intra-metropolitan) deconcentration = the process through which a metropolitan area – still recognizable as a city – evolves into an urbanized region (≈ suburbanization)

• a massive dispersal of population and employment toward the suburbs

• a decline in the urbanization share of the metropolitan core and a corresponding rise in share on the part of the suburbs.

• Types of intra-metropolitan deconcentration

• Population deconcentration

• Employment deconcentration

• Business services deconcetration

• Manufacturing deconcentration

Deconcentration (2)

• Resulting metropolitan spatial structure • The centrist perspective

• Agglomeration economies and face-to-face contacts remain key factors in location decisions

• Firms tend to locate close to one another

• A limited number of suburban centers, “new downtowns”, “edge cities”

• Polycentric metropolitan structure

• The decentrist perspective • Automobile technology, the telecommunication revolution, and

globalization have increased individual mobility

• There are no longer any distinct advantages for firms to be located within close proximity of each other

• A great number of small, scattered “employment pockets”, “edgeless cities”

• Chaotic metropolitan structure

Industrial parks in Greater Jakarta

• “Greater” Jakarta: (>) 9,000 km2

• Jakarta Metropolitan Area (Jabodetabek): 5,900 km2 • The metropolitan core (DKI Jakarta)

• The inner suburbs (Kota Bodetabek)

• The outer suburbs (Kabupaten Botabek)

• Extra outer suburbs: (>) 3,100 km2 • Eastern: Karawang (+ Purwakarta?)

• Western: Serang, Cilegon

• (Southern: Puncak-Cianjur?)

• Formal industrial land development • >35 industrial parks ; total area > 18,000 hectares

• Range: 50 – 1,800 hectares; average size: 500 hectares

• 1 urban industrial center: North Jakarta (esp. Cakung)

• 6 suburban industrial centers: Cikupa-Balaraja, Cikarang, Cikande, Telukjambe-Ciampel, Cilegon, Cikampek

Population change in JMA

0

2000000

4000000

6000000

8000000

10000000

12000000

14000000

1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

Jiw

a

Tahun

Jakarta

Botabek

(Rustiadi 2007)

FDI in secondary sectors in JMA

Region 1998-2000 2001-2003 2004-2006 2007-2009

Jakarta 15.1% 16.2% 13.0% 12.7%

Bodetabek 84.9% 83.8% 87.0% 87.3%

Inner (Kotas) 8.1% 7.5% 12.3% 11.1%

Kab. Bogor 16.6% 12.7% 11.7% 10.3%

Kab. Bekasi 52.4% 51.5% 45.0% 46.9%

Kab. Tangerang 18.1% 12.1% 18.0% 19.0%

JMA 100.0% 100.0% 100.0% 100.0%

Physical expansion

From ‘Metro’ Jakarta ...

...to ‘Greater’ Jakarta

Greater Jakarta

Industrial parks distribution

Industrial land supply

Industrial land price dynamics ($/m2)

City/district 1997 2002 2007 2011

Jakarta 228.5 77.5 - -

Suburb 74.5 42.7 61.0 116.7

Inner-outer suburb 92.0 - 66.2 123.9

Tangerang - - 85.0 113.3

Bekasi 91.5 - 58.5 150.0

Bogor - - 55.0 108.3

Extra-outer-suburb 63.8 - 38.5 91.7

Karawang 70.0 - 40.0 100.0

Serang 57.5 - 37.0 83.3

Factors triggerring manufacturing deconcentration

FDI

Industrialization

policy (late

1960s)

Market oriented

policy (late

1980s)

Cheap vacant

land

Inter-city

highways

International

ports

State-own

industrial park

(CBD)

Private

industrial park

(suburb)

Industrial zone

Global factor Government

Policy

Spatial form Regional

factor

Cheap labor

Environmental

policy (1970s)

Manufacturing employment per population 1995

Manufacturing employment per population 2001

Manufacturing employment per population 2010

Manufacturing employment change

Metropolitan zone

Employment Growth

1995 2010

Absolute %

CBD (Jakarta) 376,386 321,270

-55,116 -15

Bodetabek

Inner suburb 278,354 256,451

-21,903 -8

Outer suburb 323,072 446,199

123,127 38

Extra-outer suburb 78,587 203,789

125,202 159

Total (Greater Jakarta) 1,056,399 1,227,709

171,310 16

Scattered or polycentric?

Spatial form

Employment Growth

1995 2010 Absolute %

Planned concentration 298,749 496,672 197,923 66

Unplanned concentration 375,982 351,633 -24,349 -6

Non-concentration 381,668 379,404 -2,264 -1

Total (Greater Jakarta) 1,056,399 1,227,709 171,310 16

LQ (specialisation index) 1995

Cilegon Cikande

Cikupa-Balaraja Cibitung CBD

Metals 18,87* 0,00 0,44 3,38 0,64

Energy, chemicals, and rubber and plastics 1,61 2,82 1,64 0,82 0,61

Wood 0,00 1,40 1,93 0,98 0,78

Paper 0,00 2,42 1,34 1,39 0,88

Mining 0,67 0,00 0,97 2,70 0,71

Foods 0,00 0,00 1,17 1,01 1,16

Textile, leather, and clothing 0,00 0,48 0,64 1,11 1,19

Machinery, electronics, and automotive 2,15 0,22 0,75 0,06 1,14

LQ (specialisation index) 2010

Industry Cilegon Cikande

Cikupa-Balaraja Karawang Cikarang CBD

Wood 7,99 0,00 1,95 0,05 0,57 0,85

Energy 15,30* 0,81 0,52 1,71 0,46 0,74

Chemicals 6,07 0,58 0,66 0,12 1,07 1,13

Metals 3,68 0,73 1,17 0,99 1,21 0,50

Leather 0,02 6,27 2,30 0,10 0,32 0,10

Textile 0,00 1,36 1,68 1,35 0,90 0,55

Paper 0,00 0,00 1,11 2,57 1,46 0,23

Mining 0,56 0,37 1,62 0,61 1,31 0,52

Rubber and Plastics 0,24 0,26 0,94 1,53 1,33 0,72

Machinery 0,77 0,08 0,81 2,12 1,70 0,20

Electronics 0,00 0,12 0,04 3,49 2,01 0,01

Automotive 0,00 0,03 0,40 0,90 1,11 1,60

Foods 2,80 1,22 0,95 0,35 0,67 1,42

Clothing 0,00 0,17 0,76 0,08 0,18 2,63

Publishing 0,00 0,16 0,59 0,00 0,68 2,19

Cikarang, Bekasi

• 40 km from Jakarta,

• Receiving 50% of FDI in manufacturing in JMA

• The largest industrial estates concentration in South East Asia

• 4 industrial estates & 2 industrial cities (14,620 ha)

• 2,288 tenants typified by hi-tech multinational companies

• > 500,000 domestic & foreign workers

• > 25 countries

• A potential export up to $US 15.1-30.56 billion = 46% of the national non oil & gas export (2005).

• Extracting taxes 3.4-6 trillion rupiahs.

JABABEKA I

MM 2100

E J I P

B I I E

JABABEKA II DELTA

SILICON

LIPPO CIKARANG

DELTA MAS

Physical fragmentation

Social segregation

Sub-region

(subdistrict)

Area size

(km2) Pop.

Density

(/km2)

GDRP

(Rp

billion)

Per cap.

(Rp 000)

Kab. Bekasi 1,264 2,125,960 1,682 73,940 34,780

Ind. estates 139 416,520 3,002 42,887 102,965

S. Cikarang 52 85,260 1,648 13,401 157,176

N. Cikarang 43 168,181 3,884 14,576 86,668

W. Cikarang 44 163,079 3,733 14,910 91,429

Suburbs (12) 537 1,196,322 2,229 26,390 22,059

Rural areas (6) 588 513,118 872 4,663 9,088

Jakarta 662 9,588,198 14,494 567,707 59,209

Infrastructure (Jababeka)

Urban Center (Jababeka)

School of Architecture, Planning and Policy Development

Bandung Institute of Technology

Conclusion

• Since the early 1990s most of manufacturing employment in Greater Jakarta has been being suburbanized:

• the declining role of Jakarta City (the metropolitan core)

• the extending boundaries of the metropolitan area

• The private sector has played a substantial role in deconcentrating formal manufacturing employment

• It is likely that the spatial structure of the metropolitan area will change from sprawling towards a relatively more polycentric spatial arrangement:

• Relocation from scattered pockets, unplanned industrial zones towards privately planned suburban industrial centers.

• Specialisation among the CBD, inner suburbs, and outer suburbs

Recommendation • Build an active government role to foster linkages with the local economy and small-scale

industries

• E.g. integrated special economic zone with clear government’s entrepreneurial ambition and long-term vision

• Improve the capacity of suburban local government and metropolitan governance in order to better formulate, adapt, coordinate and implement local and regional land use plans and integrate them with regional economic policies and longer-term plans prepared by the national government.

• Emphasize institution building at the regional level to tackle major sustainability issues and improve competitiveness

• Promote multi-level coordination and cooperation among existing local, provincial and national governments rather than design of a new rigid regional governmental tier in order to better fit into the challenges of decentralization policy (otonomi daerah)

• Involve the private sector and the local community at a proportionate level in the local and regional decision-making since they will continue to play an active role in the industrialization process.

• Give more incentives for the investors who wish to move out of the congested Jakarta City and relocate their activities in designated suburban industrial parks

• Follow up the environmental regulation with stronger monitoring and control thus more industries will be forced to leave the unplanned suburban zones and scattered pockets and fill out the industrial parks.

Thank you