From `global city’ to `city of crisis': Jakarta metropolitan region under economic turmoil
Introduction
This study is concerned with the impact of the current economic crisis (Krismon) on development of the Jakarta Metropolitan Region (hereafter, JMR: Fig. 1), the largest urban concentration in Indonesia, covering Jakarta City (DKI Jakarta) and its surrounding areas, Bogor, Tangerang, and Bekasi, which is also called Jabotabek. Elsewhere, the author (Firman, 1998, Firman, 1999) has discussed the early impacts of the economic crisis on urban development in JMR. The crisis is now more pronounced, and the impacts have adversely affected almost all aspects of political and socio-economic conditions, including urban development, in the region much more severely than anticipated when the crisis began to erupt in the mid-1997. The World Bank considers a collapse on the scale that Indonesia is experiencing as unprecedented, as no other country in recent history, let alone one the size of Indonesia, has been suffering such a dramatic reversal (The World Bank, 1998. cf. Economist Intelligence unit, 3rd querter 24, 1998). Bearing this background in mind, this study will update the most recent developments of JMR under the current economic turmoil.
This region had a total population of 20.1 million in 1995, (Central Board of Statistics, 1996) consisting of 16.6 million (82.3%) urban population and 3.5 million rural population, whereas the annual rate of population growth during 1990–1995 was 3.3%. Until mid-1997, the economic activities in JMR had grown very rapidly, notably in manufacturing, trade, services, property and other sectors. In fact, JMR socioeconomic and physical development had resulted in the formation of a `Global City’ in Asia (Firman, 1998).
However, the current economic and political crises in Indonesia have turned the urban development of JMR in the opposite direction, as the crisis has severely affected the socioeconomic as well as physical conditions in the region. In mid-1997, when the financial crisis erupted, one might have thought that it was only a temporary phenomenon, and it could be soon solved by a prudential macroeconomic management, but this has been proven wrong, as the crisis has quickly spread into socio-economic and political life, including urban development (McGee, 1998).
Within this context, this study will examine the extent to which the current economic crisis has affected patterns of socioeconomic and physical development of JMR and how it could affect the development of this metropolitan region in the near future. The study argues that under the current economic turmoil JMR is changing itself from a `Global City’ into a `City of Crisis.’ The term `Global City’ is used to describe the development of large cities in the world in the light of global economic restructuring (Knox, 1994; Sassen, 19xx, Sassen, 1996, Sassen, 1997). The expanding role of city in the world economy since the early 1980s originates from the interaction of two processes: the sharp growth in the globalization of economic activities and the expanded service intensity in the organization of all industries (Sassen, 19xx).
The term `crisis’ refers to something more severe than a problem or even a cluster of problems, reflecting the shock stimulated by the severity of changes (Johnston and Taylor, 1989). As Heikila (1998) maintains, the national economic crisis is deeply urban in character and in origin, and therefore the resolution of the national economic crisis should address the urban economic crisis. Most of the major cities in Southeast Asia are suffering from severe impacts of economic crisis.
The rest of this article will be organized into four parts: The first will discuss `Global City’ formation in Asian countries and examine the extent to which the JMR's recent development has reflected such a formation; the second will examine the degree to which current economic upheavel has affected current JMR development, whereas the third will discuss the near future of JMR. The final part will conclude the discussion.
Section snippets
Formation of a `Global City': 1980–1997
`Global Cities’ play a role as a center of international finance and management, transnational corporate headquarters, nodes for telecommunication and information processing, and the centers of advance services, such as law and accounting firms (Knox, 1994). In similar vein, Friedmann (1995) maintains that the `Global Cities’ are those through which regional, national and international economies are linked with the world capitalist system of accumulation. Meanwhile a city rank in the order of
Towards a `City of Crisis': 1998–1999
As with other Southeast Asian countries, Indonesia has been shaken by the economic crisis. In general, the Southeast Asian economic crisis had its origin in the mismanagement of short-term economic policy (Garnaut, 1998). However, there are at least three interrelated factors associated with the economic crisis in Indonesia. The first of these was unhedged and bad short-term offshore debts of Indonesia's private firms (McLeod, 1997). The core of the problems, according to Evans (1998), is the
Planning for the near future: overcoming urban poverty
Given the depressing situation as discussed in the preceding sections, what does the near future of Jakarta hold? The general answer to this question is that unless the economic crisis ends and the political situation can stabilize itself soon, the urban crisis in Jakarta will continue and even worsen. There appeared to be signs of recovery in the Indonesian economic conditions at the end 1998 and early 1999, including improvement in the exchange rate of Rupiah vis-à-vis US Dollar; falling
Summary and conclusions
Until the mid-1997 urban development in Jakarta Metropolitan Region had been stimulated by both foreign and domestic investment in the region, which in turn greatly affected the built environment, notably land uses and the urban structure. In fact, the JMR urban development had been characterized by restructuring of physical growth of the region: the core area (Jakarta City) has been changed from a center of manufacturing to a center of services and finance, while manufacturing and new
Acknowledgements
An earlier version of this article was presented to the EAROPH (Eastern Asian Regional Organization of Planning and Housing) World Planning Congress, held in Denpasar, Bali, Indonesia, 28–30 October 1998. The author would like to thank two anonymous international referees and Professor Charles Choguill of the Royal Melbourne of Institute of Technology (RMIT) for helpful comments and suggestions on earlier draft. However, the author is solely responsible for any mistakes and shortcomings.
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