The development of new cities is more than just a regional development project. This policy reflects the state’s perspective on national economic development. In this context, the government’s plan to build ten new cities deserves appreciation. Moreover, as stated by President Prabowo Subianto during the Labor Day celebration, these new cities are designed with an integrated concept and connected to industrial areas.
The idea of building a new city is not a new concept in the history of development in Indonesia. Since the early days of independence, the government has utilized urban area development as an instrument for establishing new economic growth centers. History records the development of Kebayoran Baru as part of the state’s initiative to shape the urban landscape of post-colonial Indonesia.
The government-led development model continued into the 1970s with the development of Batam as a strategic industrial and trade area. The state acted not only as a regulator but also as a driving force for industrialization and the creation of new growth centers.
However, the pendulum of development began to swing in the mid-1980s in line with the global trend of economic deregulation. The development of Bumi Serpong Damai marked the emergence of a new city initiated by the private sector. This momentum was further strengthened by the construction of toll road infrastructure such as Jagorawi and Jakarta–Merak, which subsequently encouraged the expansion of suburban areas around Jakarta.
Since that time, the development of new cities has progressed rapidly. To this day, there are at least dozens of large-scale developments in the Jabodetabek megapolis area.
However, after the government opened access to basic infrastructure, development patterns increasingly reflected a market-driven economy. The private sector assumed the majority of the financing for regional infrastructure, facilities, and infrastructure. Consequently, the high demand for regional development financing also impacted the housing price structure in new cities.
The government had actually attempted to revisit the approach of public urban development through the development of the Maja Kinship City in the mid-1990s. However, the development of the area progressed haltingly for years, partly due to the weak continuity of policies and changes in development orientation between regimes.
The development of new cities has once again gained prominence as the government actively builds infrastructure. In the National Medium-Term Development Plan (RPJMN) 2015–2019, the government has once again announced the construction of ten new public cities, namely Pontianak, Padang, Palembang, Tanjung Selor, Manado, Jayapura, Sorong, Makassar, Banjarbaru, and Maja. These new cities are intended to serve as buffers for urbanization while also providing housing for the lower-middle-income community.
Indeed, the need for the development of new cities is becoming increasingly unavoidable. Urbanization in Indonesia continues to rise year after year. Projections from various institutions indicate that more than 70 percent of Indonesia’s population will reside in urban areas by 2045. This means that without the development of new growth centers, the pressure on metropolitan cities will become even more severe.
Continuing with the National Medium-Term Development Plan (RPJMN) 2020–2024, the government aims for several new public cities such as Maja, Sofifi, Tanjung Selor, and Sorong to begin operations. During the same period, Indonesia also witnessed the emergence of the mega project for the development of the Nusantara Capital City (IKN) in East Kalimantan. IKN has become an important symbol of the country’s return as a key actor in large-scale regional development.
From a development perspective, the National Capital (IKN) is not merely a relocation of the capital city. IKN represents the strengthening of the state’s capacity to direct national development. The state is not only a rule-maker and manager of public funds but also acts as the main actor in the economic development of the new city.
Now, the government is once again initiating the development of ten new cities. Although it has not yet been fully detailed in the national development planning documents, various reports suggest that this new city development will likely focus on the optimization of state assets, the utilization of abandoned land, expired business use rights (HGU), or expiring building use rights (HGB). This means that the state is beginning to use land control instruments as a strategic capital for national development.
This new approach to urban development also emerged amid a reinvigorated role of the state in the economy, a trend toward a developmental state. This is characterized by the state acting as the primary director of development, while still allowing for market and private sector participation, as practiced in China and Singapore.
The changing patterns of urban development over time truly reflect the shifts in Indonesia’s economic paradigm. We have experienced a phase of development that was heavily state-driven, and then transitioned to a more liberal and market-oriented phase.
Experience has shown that state-led development is not always synonymous with legal certainty and sustainability, even when supported by substantial regulations and public funding. Conversely, development that is entirely left to the market does not automatically result in affordability or accelerated progress.
Therefore, the present time is a very decisive period. Indonesia stands at a crossroads between strengthening the role of the state and the need to maintain market confidence. However, learning from historical experiences, particularly in East Asia, what Indonesia needs at this crossroads is not a conflict between the state and the market, but rather a compromise and pragmatic attitude in development.
The role of the state must remain strong to safeguard national direction and interests, but at the same time, the market and the private sector also need to be given space to grow and develop. Both must be equally strong in building new economic growth centers, creating jobs, ensuring the right to reside, and paving the way towards national prosperity as envisioned in the 1945 Constitution.
Sources: Kompas.id – The State, the Market, and the Ambition of Building New Cities
