Jakarta is a Global City, between the Certainty of the Economic Engine and Agglomeration Issues

This is because Jakarta provides various business fields or job opportunities and service facilities for the surrounding communities. On the other hand, Jakarta receives support from natural resources (clean water), food sources, affordable housing land, and so on from the surrounding areas.

"In short, the economic growth of areas surrounding Jakarta is highly dependent on Jakarta. Now, when we talk about Jakarta, it is difficult to separate Jakarta which has already become agglomerated with the urban areas around it because they are already integrated. However, the coordination between Jakarta and other cities is still relatively weak," said Ernan on Wednesday (24/4/2024).

According to Ernan, in reality, since the era of regional autonomy, inter-regional cooperation has generally been very difficult to achieve, including in Jabodetabek. For example, the BKSDA (Natural Resources Conservation Center) forum in Jabodetabek has long been established but its collaboration is very limited and not fundamental.

"In the post-capital transfer era, there will be no changes in terms of inter-regional cooperation unless there are regulations at the level of law and of a lex-specialis nature that can force and facilitate cooperation, accompanied by the existence of a coordinating institution with capacity of authority. strong," he said.

As a global city, Jakarta, according to Ernan, is still not able to compete with global cities in other countries, such as Bangkok and Kuala Lumpur, which are close to Indonesia.

Also read: No longer the capital city, Jakarta is still attractive to investors

The transformation of Jakarta towards a global city not only depends on the economic sector but also on the supporting infrastructure. The development of world-class infrastructure, such as efficient transportation, advanced telecommunications, and sustainable energy, needs to be a priority.

"However, with the reduced function of Jakarta because it is no longer the capital, this should be a moment for Jakarta to be more focused and able to compete with global cities in other countries," he said.

However, the relocation of the capital city is deemed unlikely to significantly reduce congestion in Jakarta and its surrounding areas due to the high potential of growth in vehicle usage. The reduction of congestion will only occur if there is a significant change in transportation usage patterns from private vehicles to mass public transportation.

Economic engine

Urban planning observer from Trisakti University, Yayat Supriatna, conveyed that the economic driving force in Jakarta is still dependent on large and small scale trade, as well as the repair of cars and motorcycles which belong to the tertiary sector. Therefore, congestion cannot be stopped due to the high demand for vehicles.

This is in line with the data on Jakarta's Gross Regional Domestic Product (GRDP) from 2021-2023, which states that the largest business in Jakarta is still driven by the transportation sector with a total of 29 million vehicles in Jakarta, and 19 million of which are motorcycles.

"Currently and in the future, Jakarta is dominated by the tertiary sector as the basis of the economy. To what extent can this sector provide prosperity and change? Why is the secondary sector (manufacturing) not a priority?" he said.

Currently and in the future, Jakarta is dominated by the tertiary sector as the basis of its economy. To what extent can the strength of this sector provide prosperity and change?

According to Yayat, the tertiary sector has the potential to trap its residents in low-income levels with deteriorating infrastructure services. Meanwhile, Jakarta and its neighboring cities/districts' economies are increasingly leaning towards the tertiary sector.

"The economy will move in that direction. As a result, Jakarta in the future will be crowded with motorcycles driven by people with limited income. This is a big problem. Traffic congestion will also not be resolved," said Yayat.

Other business sectors currently supporting Jakarta's economy are the processing industry at 11.87 percent, financial and insurance services at 11.09 percent, construction at 10.82 percent, and information and communications amounting to 9.32 percent.

On the other hand, according to Yayat, the manufacturing or processing-based business sector will generate higher income due to the need for improved skills and service quality. The existence of the manufacturing sector will also have an impact on the development of roads, housing, ports, and other supporting infrastructure.

"The secondary business sector, especially manufacturing that is based on the development of digital technology and information industries for the global market, should be relied upon for the improvement of welfare and development of city infrastructure services," he said.

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Meanwhile, another economic strength for Jakarta can actually be found in the financial services of insurance and companies. However, this sector is not possessed by surrounding cities such as Bekasi, Depok, Bogor, and Tangerang.

Yayat assesses that economically and infrastructurally, currently Jakarta is actually still able to stand independently. However, the surrounding city and district areas are very dependent on Jakarta's role as a major city.

Therefore, in order to realize Jakarta as a global city after no longer being the capital, Jakarta must have an economic engine to revive its region and surrounding cities.

Currently, according to Yayat, the most important thing that needs to be done in Jakarta is to develop its surrounding towns into a unified entity. This is because, functionally, Jakarta and its neighboring cities have become a unit of regional and economic ecosystem.

"Because, cities that fail to prepare the economic engine, infrastructure and technology for the future will experience 'osteoporosis' or the fragility of their supporting capacity for growth," he said.

Increase competitiveness

Chairman of the Jakarta Association of Regional and City Planners (IAP) Adhamaski Pangeran assessed that to become a global city, Jakarta's future development must focus on economic growth and increasing competitiveness as a world financial and investment center. Therefore, Jakarta needs more central business districts (CBD) for head offices for multinational companies investing in Indonesia.

This year, Jakarta's competitiveness continues to decline. Referring to the Global Financial Centres Index, Jakarta's ranking has dropped from 69 in 2019 to 102 in 2023. Meanwhile, the Kearney Global City Index stated that Jakarta's ranking fell from 59 in 2019 to 74 in 2023. On the other hand, the MORI Global Power City Index 2023 positions Jakarta's competitiveness below Kuala Lumpur, Bangkok, and Singapore.

Adhamaski hopes that DKJ Law can have a positive impact on increasing Jakarta's competitiveness. One of them is related to the expansion of Jakarta's authority in financing and providing housing as well as the expansion of authority to develop public transportation networks to buffer areas.

"The expansion is very good. Because the problem in Jakarta has actually been triggered by the limited financial capacity in the supporting areas," said Adhamaski.

However, he disagreed with the agglomeration areas that still rely on Jakarta's budget. There doesn't seem to be any special allocation of funds from the central government to support the agglomeration areas.

Also read: Towards DKJ, the Bodetabekjur Agglomeration Area Needs Legal Certainty

Therefore, Adhamaski supports the proposal to establish an urban endowment fund (urban fund) to increase the financial capacity of the Jakarta area and its surroundings. Urban funds are believed to be able to resolve various development obstacles, such as overcoming urban sprawl in cities.

Adhamaski reminds us to utilize the existence of the agglomeration area under the Jabodetabekpunjur Agglomeration Council optimally to improve the coordination of Jakarta and its surrounding areas' spatial arrangement.