This paper is prepared for staff use and is not for publication. The views expressed are those of the author and not necessarily

Public Disclosure Authorized those of the Bank or the Association.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

INTERNATIONAL DEVELOPMIT ASSOCIATION

Economic Staff Working Paper No. 105 Public Disclosure Authorized

Greater Dakarta The Ca ital City of Indonesia Public Disclosure Authorized

This paper examines the economic and social problems of the leading city of Indonesia in the context of a rapidly increasing Indonesian popu- lation. It is based on the urbanization chapter of the report of the East Asia and Pacific Department, The Indonesia Economy: Development Trends and Forei- Aid Reouirements, 1970-1972, November 27. 1970. Public Disclosure Authorized Economics of Urbanization Division Prepared by: Robert W. Oliver April 21, 1971 TABLE OF CONTENTS

Page No.

Introduction ...... 1 7 The People ...... *

Industrialization, Eknployment and Income ...... 18

..... 20 Land ......

Planning and 7oning ...... 21

The Master Plan ...... 23

Land Prices ., 28 29 Infrastructure ......

.Surface Transportation ...... 37

Government ...... 4.1

Revenue ...... 46

The Development Budget...... 46

Conclusions and Recommendations ...... 50

A Note on Land Ownership and Transfer Laws and Building Procedures ...... 55 TABLE OF CONTENTS (Continued) Page, No.

FIGURES

1 Population in Djakarta, 19htl- 1969 ...... 10, 2 Births and Deaths in Djakarta ...... ii

3 Indonesia: Major Roads and Lahnd Use Plan, Djakarta 78 TABtLES

1 Population Increase; Cities of 100,000 and over in 1968; 1961 to 1968 ...... 61 2 Gross Domestic Product o-f DCI Djak-arta by 'I1ype of Indu-stry as a Share of the National Economy (in Percentages) 1966-68 ...... 63~ 3 Gross Domnestic Product, Djakarta,, 1966-68...... 6h

4 Percentage Distribution of the Gross Domiestic Product, Djakarta by Category of Economiic kActivity, 1966-68 ...... 65.

5 Distribution and Percentages (IrŽ Parentheses) of Economic Hous'eholds Specified According to Status of Residence aihd Nature of Construction, 1969 .... 66 6 'Distributio-n and Percentages (In Parentheses) of Households Specified According to Facilities oh Electricity and Water Supply by Income Groups, D jakcarta, 1969 ...... I ...... 67 7 Main Industrial Groups by No. of Establ-ishments and Emnployees, Djakarta, West Java and Java, 6

1963 ...... o ...... 6 8 Indonesia: NMtor Vehicle Registrationis, 1962 and 1969, Geogrephic Distribution - Units ...... 69

9 Nfumber of Motor Vehicles Passing Certain Roads on the same days and Certain Time in DCI Djakarta in 1969 O ...... 70 TABLE OF CONENTS (Continued) Page No.

TA BLES

10 Central Versiaus Lower Level Government Revenues 71

11 ADO Export Receipts by Regional Governments.... 72

12 Contribution by Central Government to Provinces 73

13 Total Income, Provinces and Kabupaten, 1968 and 1969-70 74

14 Municipal Revenues in Indonesia, Selected Cities 1969-70 75

15 Recapitulation of Planned and Realized Revenue Budget of the Government of DCI Djakarta in the First, Second and Third Quarters of the 1969-70 Service Year ...... *...... 76

16 Recapitulation of the Planned and Realized Ex- penditure Budget of the Government of DCI Djakarta in the First, Second and Third Quarters of the 1969-70 Service Year ...... 77 GREA.TER DJAKAR'TA, THE CAPITAL CITY OF INDONESIA

Introduction

1. This paper is an introduction to the economics and sociology of urbanization in Indonesia. It illustrates the complexity of urban growth and decision-making in a developing country. Urbanization, the relative increase of the population living in urban areas, and industrialization, the relative increase of the labor force employed in industry, are not taking place rapidly in Indonesia as a whole. Nevertheless, the absolute number of people living in Indonesian cities is rising as the total population continues to explode,-/and the population of Djakarta is exploding. Urban infrastructure

1/ The population of Indonesia classified as "urban" in the 1961 (most recent) census of population was 14.5 percent (1)4.3 mnillion) of the total population of 97 million. It is estimated by the CenLral Bareau of Statistics that this percentage has not changed since 1961, and it is projected by the Regional and Development Planning Bureau of RAPPENAS that the urban population of Java will be 15 percent of the total in ten years.

It appears that the percentage of the population living in large cities is increasing slightly, While the total population is esti- mated by the Central Bureau of Statistics to have increased by over 20 million persons, or 22 percent, between 1961 and 1969, the popu- lation of Indonesia's 14 largest cities (150,000 or more) increased by about 1.9 million persons, or 22 percent between 1961 and 1968. Figures for the 26 largest cities (100,000 or more) derived by the Directorate of City and Regional Planning are given in Table 1. These estimates are higher than those of the Central Bureau of Statistics but are probably less reliable.

It is supposed that natural rates of population growth are lower in urban than in rural areas. According to a Family Planning Mission which visited Indonesia in 1969, "the annual growth rate (of the total population) has increased from 1.5 percent between 1930-69 to a current rate of 2.9 percent." Natural growth rates of 2 percent have been assumed in the past in Djakarta, though some recent esti- mates indicate a current rate of nearly 3 percent. If natural growth rates are lower in cities, this would explain how many cities are receiving some net migration from rural areas even though their populations a:e increasing no faster than the national average. 2-

and public services, already inadequate, are being stretched. New demands are being made on financial and managerial resources, demands which the cities are meeting with difficulty if at all.

2. This paper is about Djakarta Raya, greater Djakarta, Indonesia's capital, its largest and fastest growing major city, its harbor and its airline entrance to the world. It is about an imaginative city government confronted with slums, underemployment, congestion, pollution and lack of essential services and facilities. Additional research will be required to identify and measure all the forces which will influence the future of

Djakarta and determine the role, Djakarta may play in the development of

Indonesia. Additional research concerning other Indonesian cities is also needed. Nevertheless, the picture painted here may provide some understand- ing of major urban issues and some background for additional work.

3. The people of Djakarta will be considered first -- their inmigration, employment, income, housing, education and health

facilities and their general condition of living, It is presumed that an improvement in per-capita income in Djakarta will require

an improvement in indu5try, for which reason the industralization

problems of Djakarta will be considered. Land, infrastructure and

transportation will be discussed in turn. It is also presumed that some of the bottlenecks to urban development would be reduced if the revenue available to the city government were increased, for which reason the revenue problems of Indonesian cities are examined, The paper concludes with some recommendations for po:3sible action and some suggestions for additional research. -3-

4. For the most part, this is a straightforward description of Djakarta, 1970, but it may be considered in the light of various conceptual issues common to major cities in less developed countries.

A significant debate is under way, for example, concerning the optimum size

of cities and their role in the development process. Does the logic

cf the spatial organization of economic activity dictate that large

cities should get larger without limit as populations grow and as transportation and communication facilities improve? Or do the rising costs of urban renewal and the social costs of spreading slums, congestion, pollution and ugliness suggest a strategy of national planning to reduce the pull of the megalopolis? Does it matter whether capital investments in urban infrastructure, including health and educational facilities and housing as well as transport and utilities, are located in large cities or small? Do cities as such possess characteri.stics which render them unique incubntors of growth and deserving, therefore, of special con- sideration in the all.ocation of national development expenditures? c:. Evidence supporting tentative conclusions about these issues is being gathered through case studies such as this. Is Djakarta too big or too small? Is it growing too fast or not fast enough? Should capital investments be made which will improve Djakarta's capacity to provide amenities for its citizens, jobs for its underemployed and infrastructure for its declining cost industries? Of course. But how ;3'

much? Shoul:d Djakarta be encouraged to grow faaster than 3utaba .a,-

Thdonesia's second largest city? Should t-he pressure on Djak'arta be

relieved by a planned shifting of some economic activities to Bandung

or Bogor, 100 and' 30 miles respectively from Djakarta?

6. Djakarta provides many of the central PIa-e functionr ot' i prjimat,

city, a city that is to say which dorminates the qurroundink', cit,ies and towns 2/ so, completely that intermediate cities are unnecessary.- Sixt.y percent; o-t'

the monetary transictions of Incdones ia, occur in Djalk(trta. Mos-t o1' the non-

extractive foreign investments ini.tiated in In.donesia in r3ecent years are located in Djakarta; Djak_nrtA is a major center for tran., r'r)1't., cofflfluni-

cations, finance and insuranrice, and it is disnroportionately importnnt

in value added by util-ities, manufacturing, construction, government, 3/ defense and wholesale and retail trade.` Still., there are intermediate

cities, SArabaj' and Bandunp, which fulfill important, central city functions

1/ For estimatues of the population of' Thdone:ia I s major' cities, see Table I.

2/ See Brian J. L, Berry,, "City Size Distributions and Economic Development," Economic Development and Cultural Chane, Vol. 9 (July 1961). 3/ See Table 2. 5

for their regions. By rank-size rule- one of these cities, now roughly

one-fourth as large as Djakarta, should probably be larger. So should

Semarang and Medan the fourth and fifth ranked cities each with popula- tions one-eighth that of Djakarta.

7. Tihile no one Would expect to predict the population of any city on the basis of a formula using the population of another city as the only independent variable, the logic of underlying urban relation- ships is clear:

1/ The rank size rule in its simplest form states that each city should have a population equal to the population of the region's (country's) largest city divided by the rank of thiat city in order of its size.

Pr= P1/r

whero P1 is the population of the first ranked city Pris the population of the city with rank r.

A more sophisticated statement is

r where q is a constant.

"A recent study shows that the rank-size regularity applies throughout the world for countries which are highly developed with high degrees of urb;nization, for large countries such as India and China which in addition to being large also have long urban traditions; conversely, "primate cities" or some stated degree of primacy obtains if a country is very small, or has a "dunl economy." Moreover, additional studies have recently shown that many distributions with some degree of primacy take on more of rank-size form as level of development and degree of urbani- zation increase." Brian J.L. Berry, "lCities as Systems within Systems of Cities," Paper presented at the Annual Meeting of the Regional Science Associqtion, Dec. 1963, reprinted in John Friedmann and William Alonso, Regional Develonmenr and Planning (Cambridge, Mass.: The M.I.T. Press, 1964), p. 119. -6-

a) Many economic activities cannot take place in isolation;

they require the nurturing external economies and market concentrations

provided by cities..

b) Not all urban economic activities can take place in all

cities. The lowest cost solution to the national production of urban

economic activities requires that 1) cities specialize in relevant

resource-oriented production for reasons of comparative advantage;

2) some economic activities must serve a market area which inlclu-

des, a number of towns and cities as well as intervening rural areas;

and 3.) these specialized economic activities should be located near the

geographic center of the market area so that the costs of transportation

and communication may be minimized..

c) The costs of adding to the economic activities of a city

mayt rise significantly after the facilities used collectively by

cornsumers and business firms become fully employed, particularly if

some of these (e.g. sewers and streets in the center of the city) can

be added to only by re-building and some (e.g. centrally located land

and clean air) cannot be added to at all.

8. But cities must be thought of not only as systems of production.

They are systems of consumption and of culture Ps well. Indeed, in the

long run, the role of cities in the development process may turn primarily

on their contribution to the quality of life and to their influence in

chnnging traditional cultures to tnodern, all of which makes the analysis

of cities complex. As the population of a country incrp.qses, as the level an(d distribution of income ch,4nges, as technology changes and as trans'por- tation and communication costs change, the optimum location and size -7-

of cities will also change. At any given moment of time most cities

will be in a state of flux buffetted, so to speak, by expansionist and

contractionist forces and rising and falling costs. The administrator

of a city will observe population migration, a changing pattern of lpnd

prices and uses, varying degrees of business success and failure, shortages

of some public facilities and, perhaps, surpluses of others, and demands

by citizens for more public amenities and lower taxes. Thus, he must

arbitrate and allocate, he must forecast and plan, all of which requires that he understand the basic economic, psychological, sociological and political forces at work. Further, the organic growth process of cities must be under- stood by national. planners concerned with analyzing and projecting economic develop- ment. It is hoped that some of these issues will be illuminated by what follows.

The People

9. On August 5, 1970, a decree went forth stating, in part:

Governor Head of DCI Djakarta, considering that urbani- 7.ation to Djakarta city has reached a level which may en- danger the safety of the living of Djakarta community, so that it is regarded necessary to take an effort, for the sakIce of safeguarding development policy and program of the capital which has been ou tlined so that they remain under direction and may score the targets, by declaring Djakarta as a closed city. 1/

> Decree of Governor.f Head D-Dakarta. No. IB. 3/1/27/1970

translated by CommerciaJ Au;iaLory, Foundation of Indonesia. 10. By "urbanization" the Governor meant the migration into

Djakarta from other regions. By "closed city" he meant that. the ULrl h

of Djakarta! should no longer issue Resi'cnt Identific;qtion Cards to

newcomefrs not havinF employment and a place to live. Presumably th )se

without cards will be -deported, thoufghh t.here h!lve been no reportts of

deportations thus far.

11. This rather extraordinary proclamation wais- riot, precinit.at.e. The cbos ing -of Djakarta has been considered for a t least L- years, and the

reasoxns are apparent:the quality of life in Djakarta worsened steadily as tl-% post-independence wave of humanity swept over a city whose facilities were not maintained and expandedl commensurately. Whether or -not they

could have kept pace is unclear, though it is doubtful:; an imaginative city administration has tried since 1966 to turn things around and the issue is still i.n doubt.

12. Djakarta lacks a dependable supply of electricity) gas and potable water, a waste disposal systerrm, smoothly flowing traffic, rational land use, and adequpte public schoolls and health facilities. Yet, for nearly 5 million peopl]e it is The City - alive., dynamic, modern, beautiful

-- a land of freedom and opportunity. It has a varipty of sights and

l/ A Lurah is a sort of local chief. Djakarta is dlivided into 2'9 Kelurahan or municipal subdistricts each presided over by a Lurah appointed by the Goverrior of Djakarta. For additional information on the administrative structure of Djakarta, see -infra., pp. 4i-4-3. -9-

sounds and smells, of goods and shops and people unlike those to be

found in the countryside. Djakarta is the capital city, a magnet for

the bold and the curious who come to see and, frequently, to stay.

13. The population in 1930 of the city called Batavia by the

Dutch was 533,'000. Apparently it was little more than that at the end

of the Second World lWar. Since 1947, as shown in Figure 1, particularly during the decade of the 19 60's, the population growth of Djakarta has been explosive. At the growth rate applicable when the Governor declared

Djakarta a closed city, the population will double again in another decade.

It is, of course, too early to tell what effect the Governor's proclamation will have. It is not designed to keep out those who can quickly find employment, and it will be difficult to enforce in any event. What is clear is that Djakarta even more than the rest of Java is being inun- dated by people.

IL. It is estimated, as shown in r'igure 2, that births in Djakarta ro.se steadily from 1962 through 1968, while deaths remained more or less const,ant. The na.tural rate of population increase has risen from approxi- mately ? percent before 1960 to nearly 3 percent per year. Family planning efforts, begun in 1967, have had little overall impact. 6961 !891 c;) LLO ;XR Z9a

M S9 m

Z9 A 191 00961

Oll PI , 6gs9j7 ol

0Ii61 Z X £S to co Z9

o 0 00 Co, C7) - 11 - Figure 2

BIRTHS AND DEATHS IN DJAKARTA

200,000-

\\ BIRTHS

100,000

50,000 DEATHS

U - - - ,,,-. - -m--. . - - .

1962 1963 1964 1965 1966 1967 1968

YEARS

IBRD 5397(R) - 12 -

15. One consequence of this high rate of natural increase is that over half the population is under 20 years of age with all that implies for schools, for the tax burden on the fully employed, and for continuing population increase for many years even if each family unit should no more than reproduce itself.

-16. Neverthel co8s, 1Ies tJ)',-in hrl f uf J'he. porpti :i! gn[w! II ()kt'DJ,Bi k!

since 1947 may be attributed Lo nr,urrii -rowth. MifnDtion ft-orn rt'lral area,

and lesser towns has occurred more or less cont;inuously wit.h waves

of migrants coming in 19)8 and 1949 as the fight for independenice ceased

and in 1959 as the countryside became unsafe while the national forces

of Indonesia crushed the rebellion of the outer islands. Since 19b7,

migration to Djakarta has exceeded lO0,0noc persons per year.

17. The reasons for this rm.ig.ration are complex and deserve detailed,

scientific investigation. Economic factors would appear to be important,

though they are difficult to isolate or quantify. The best available data suggest that the per capita income in Djakarta is 25 percent higher than for the country as a whole, but this tells us nothing about the distribution of incomo or about the income available to unskilled migrants. Per capita income -figures are raised by the well-to-do of whom there are many in

Djakarta. Official statistics indicate, that over 80,000 persons

(6.1 percent of the active labor force) are unemployed or underemployed, but this estimate is undoubtedly low. There are thousands of redundant employees in the hotels, the airport, the small shops and the government offices,

and the money value of the marginal product of the lower income employees

in large organizations must be lower than their wages. Squalid living

conditions in the slums of Djakarta can haidly be better in a measurable

economic sense than those from whence the migrants came, though many new

arrivals live with their relatives to the economic disadvsntage of the

latter and their incentives to produce.

18. Immediately after lWorld W4ar II, people were drawn to Djakarta

becauise relief shipments were delivered there. From 1948 through 1952,

after fighting for independence ceased, people were drawn by

the excitemernt of, and expectations generated by independence. In 1959,

they were drawn by the desire for security, in the early 196 0's by the

monument building (and government employment) program of Sukarno, and

s.ince 1967 by the news of a new and better government. None of these

evernt8: itnpl i,os, anythinf about the marginal. productivity of the Djakarta

TLbor f'opee rco ie to the rest of Indonesia.

19. Ai ptsycholo is t tho University of Indonesia ans-cribes the migrntion primarily to a rlen,ire for freedom from the restraints of tra- ditinna'l rural society regardless of economic conditions, though he nagrees tha.t, scientific evidence for this judgment is lacking. A house- to-house survey of over 11,000 households was conducted in Djakarta in -14

1954 under the auspices of the Institute for Economic and Social

Research of the University of Indonesia. At that time, improved economic circumstances for most seemed to be indicated, and n desire for improved educational opportuinity was a motivating force.1 " It would be extremely helpful. if a similar investigation, done this time with more assistance from psychologists and anthropologists, could be carried out today. It is difficult to evaluate economic policy for Djakarta or

WTest Java or Indonesia in the absence of reliable information on the marginal productivity of the labor force of Djakarta, on the distri- bution of income by categories of occupation and on the reasons for migration throughout Indonesia.

20. Some information on income and employment is given in Tables 3 and 4, though employment, wage and size of establishment statistics for more detailed subdivisions of economic activity over time are needed for thorough analysis. Table 4 displays one striking fact about Djakarta: over 50 percent of the grosg domestic product is derived from wholesale and retail trade and less than 10 percent from industry. In a hiph per capita income metropolitan area, the former would be significantly -lower and the latter would be higher. Furthermore most of the trade is carried

1/ See "The Urbanization of Djakarta," Econiomi Dan Kerangan Indonesia, Vol. VII, No. 11, November 1955. This investigation estab- lished that 75 percent of the residents interviewed had been born out- side of Djakarta primlarily ini rural west Java, atid that a third had moved to Djakarta from 1949-1953. - 15 -

out by low productivity family units.

21. Given the present rate of population increase, it may be sup--

posed that 4O,OO0 or so new households are added in Djakarta each year,

but only 2,000 to 3,000 new permanent housing units are approved annually

by the Djakarta Office of Public Works. (Temporary housing, which in-

cludes housing not using government-supplied power, does not require a

permit). Only 20 percent of the housing units in Djakarta are permanent,-

and only 8 percent use both electricity and mnunicipal water.J/

22. It is estimated that the cost of construction of new, permanent

housing in Djakarta is between Rp 15,000 and Rp 30,000 a square meter

(roughly US$lt and US$8 a square foot). This would place the minimum cost of

a 50 square meter (500 square foot) house at Rp 750,000 or almost US$2,000,

or something like 25 times the annual per capita income in Indonesia (perhaps

17 times the annual per capita income in Djakarta), and these rough calcu-

lations leave the cost of land entirely out of account.

23. A few 200 sq. meter houses built by the city of Djakarta on govern-

ment land near the by pass road-/are offered for sale to Indonesians for

Rp 7 million. Assuming the houses occupJ less than 50 percent of their lots,

this would impute a value to the land of something like US$5/sq. meter and is

consistent with independent i-nformation on land prices in that area. In any

event, it appears clear that well less than half the population of Djakarta

perhaps 20 p,ercent -- can afford permanent non-subsidized housing, and no low

cost housing program is being contemplated by any level of government.

1/ See Table 5. 2/ See Table 6. 3/ Sep gF-ure 3. - 16 -

2h. In the short run, moreover, housing is made to seom more soarce

than otherwise by the influx into Djakar't. of foreigners ableL to p.a.Iy what-

ever price is necessary for better houses and flats. The Prinnal price

(rent) they pay (in advance) is somet-hingr like one-third of the total

construction cost of the house. This seems h1igh to some bu. it may not

be excessive in an economy where the ruJ.I cost of (caIpital iin tJie f roe

market is prcperly very high.

P5. There is no sewer systeni in Djakarta, thoughli somv housing-)l un.its

and plants have septic taniks or cesspoo2s-. Some pa.rts of Djakarta are

served by a city refuse collection service, though in most of Djakarta.

garbage and other refuse are burned or dumped into the cana.l-. Ttle water

sold by the city is polluted and flows through the corroded distribution

system with virtually no pressure. Well water is used by some, thou:Yh it

is also polluted. The water table is near growud level, and well w-ater

except from very deep wells is contaminated by the cesspools.

26. As shown below, the number of hospitals, beds, maternity wards,

clinics and medical institutions has generally kept pace with the population

since 1964. The ratio of people to hospital beds is over 1,200 to 1, however, and there are over 20,000 people per doctor. Fortunately, there have been no major epidemics in Djakarta, though there is constant concern abQut such water- borne diseases as cholera and dysentery.

1/ To some extent the canals serve as a sewer system. See infra, pp. 32-34. - 17 -

Maternity Medical Year Hospitals Beds Houses Beds Clinics Institutes

1964 25 4,913 48 1,260 108 405 1965 22 4,226 64 1,311 106 430 1966 22 4,226 72 1,335 109 383 1967 36 5,153 77 1,712 119 406 1968 38 5,320 94 1,934 133 427 1969 38 5,571 111 2,102 153 483

Source: Census and Statistics Office, Djakarta

27. Over 30 percent of the total city budget in 1967 and 1968 was allo-

cated to education. In 1969, this expenditure was reduced to 12 percent of the

budget but was supplemented by a subsidy from the central government, nominally

responsible for secondary education throughout Indonesia. The improvement in

primary education is shown below. Nevertheless only about 50 percent of the

children in Djakarta eligible by age to receive primary education actually

attend school.

Number of Students, Teachers, Schools and Primary School Buildings in Djakarta, 1968-69

Year Pupils Teachers Schools School Buildings

1963 304,,248 5,789 814. 54h6 1964 334,382 7,324 890 561 1965 334, 6 6 1 7,h430 913 583 1966 372,631 7,687 1,021 644 1967 385,017 8,539 1,108 754 1968 270,837 10,186 1,207 823 1969 473,676 11,439 1,332 934

Source: Representative Office of the Department of Education and Culture of DCI Djakarta.

28. There are signs of growth anXd improvement in Djakarta. During 1969,

13 new hotels with 2,431 new rooms were approved for projected new construction.

The number of licences granted for the transfer of property rights increased - 18 - from 766 in 1968 to 1,122 in 1969. These licenses involved 586,159 sq. meters in 1968 and 1,308,822 sq. meters in 1969. The land area involved in permits to transfer land for building use doubled in 1969 over 1968. The number of major crimes declined from 1966 to 1969. The increase in the number of radios and television sets used in Djakarta is summarized as follows:

Year Radios T.V. 1962 124h,58o 1963 141,309 1964 169,987 1965 205,49)4 38,393 1966 263,174 47,438 1967 350,665 56, 760 1968 421,9947 78,531 1969 469,162

Source: Census and Statistics Office, Djakarta Industrialization, Employment and Income 29. Cities have two primary related but separable functions: to provide their inhabitants as consumers with more goods and services (including culture, knowledge, experience and leisure) than they could enjoy if they did not live closely together, and as producers with more production for a given cost than they could deliver if they were not located in close proximity.1' Cities have a powerful role to play in providing the institutions and encouraging the in- tricate economic inter-relationships which collectively yield a higher measure of well being for the people. 30. - Cities in developing countries are particularly useful if they can nurture growing indust-ries which can increase output at declining unit costs over time providing more employment and rising wages. This is not to say that industry is the only proper economic base for a city. Djakarta has a long run

1/ Unemployment must also be minimized and income equitably distributed. - 19 - comparative advantage in banking and insurance, in gcvernment (and defense) and in shipping and air transportation. It has had a least a temporary economic base in new construction. (More recent figures would probably also show that the Djakarta economy is growing at the moment largely because of foreign tourists and visitors. It is estimated that 10,000 foreigners are now in Djakarta, most of them with ample expense accounts, buying food and souvenirs and services and housing -- bidding up some prices but generating income.) In the long run, however, declining cost, innovating industries serving national and international markets are particularly useful because they may be a major source of rising labor productivity.

31. Some indication of Djakarta's comparative advantage in industrial activity in 1963 (when the last census of marufacturing was taken) may be in- ferred from Table 7: printing, chemicals, metal products, electrical machinery and transport equipment. This assessment will be improved when a new census of manufacturing has been completed in 1973.

A2. Since the passage of Law No. 1 of 1967 on Foreign Capital

Investment, the Central Government of Indconesia has sought to encourage rInw industrial enterprise. In addition to returning to foreign companies thie use for up to 30 years of assets previously expropriated, the central government has offered tax and other incentives to foreign and domestic companies. The government of Djakarta has similarly sought to attract new investment. The Djakarta Investment Office was created in 1969 to help potential investors find land, though this useful office is handi- capped in its efforts by the unavailability of land a'ready serviced by ut ilities.

3 3. Investors are responding to the improved atmosphere in Djakarta and eli;ewhpre in Indoonesia. According to Djakarta sources, nearly Rp. 3 million 20 -

of domestic capital and Rp. 90 billion of foreign capital were comrdi.tted

to the Djakarta area from January 1, 1967, through the first quarter of 196 9.

34. Foreign investors give good report2, shout Tndonesdinn ]abor>.

IWorkers Eund managers are quick- to learn, .slilled whern trained, dollendabl-e,

conscientious, intelligent; they are competitive with their counterparts in other

c)unitr2ies. Labor i-s not, a bottiolerieck. 'l'he 1rul: diwirdritsF lo more rap).iJd

domestic investment appear to incliude a sotort;ag o inve -itment api t,al,

a relative lack of awareness of managenient and tarket;ingt¢cmiques cxvcr

on a small scale, and, perhaps, some cultural bias against business enter-

prise accentuated by the relatively imore honorific status accorcled those

in, Indonesian society who pursue careers in religion, government, teachin7lg and the armed forces.

35. The impedinents to more rapid foreign investment include the

difficulty of obtaining land.and the relative unavailability or high cost

of infrastructure. A transportation bottleneck impedes all productior

activity in thle Djakarta area. These i.ll be considered in tum,.

Land

36. The difficulty of obtaining land for industrial development in

Djakarta is less a fimction of price than of the law and th( institutions and the red tape of governmaent. A major problem. is jurisdictional. The

Central Government has established a Nabtional Industrial Eltate Authority designed to coordinate the planning and execution of various agencies responsible for providing land ard infra-stnrcture for - 21 -

industrial estates throughout Indonesia. But the city (province) of Djakarta

has its own Investment Office, its own Planning Department and Master Land-Use

Plan, and its own reasons for promoting industry in areas different from those

favored by the Directorate of City and Regional Planning of the Department of Public Works of the Central Government.

37. In the long run, the National Industrial Estate Authority may prove

useful, but in the short run it is likely to be just one more institution im-

posed between the potential investor and the land he seeks to use. If the

government of Djakarta had complete Jurisdiction over private investment within the city boundaries, if clear-cut industrial zoning were well publicized, if printed building codes were available and land prices remained reasonabl;y com- petitive, industrialization would almost certainly proceed rapidly in greater

Djakarta and would do so without damage to basic Indonesian laws or institutions.

There are many competent firms willing to put together a number of enterprises in an industrial estate or park, including new low-cost housing, but they are confronted by the prospects of negotiating with so many government bureaus, boards and committees that tney do not know where or how to begin. Improved regional land use planning and a staged development program are needed. Planning and Zoning

38. Modern land use planning in Indonesia was encouraged by town ordinance 1948 No. 168 and Town Planning By-Law 1949 No. 40 authorizing every town to prepare a plan. An outline plan for Djakarta was prepared in 1957 by a team of experts from the United Nations together with

Indonesian planners. With modifications, this became the basis for - 22 -

the Master Plan of Djakarta,-/ approved in 1967. Subject to review every

5 years, this plan may be modified by the Governor of Djakarta who some- times uses his authority in his negotiations with prospective new investors.

For example, he recently authorized a new industrial zone in Gandaria, an area previously reserved for residential use toward the far southern end of the city on the west side of the Bogor road abutting the Tjipinang

River.2-/ The Mister Plan has the effect of zoning law in Djakarta s4nce it is used as a land-use guide by the Djakarta Office of Planology whose approval is necessary before building construction may begin. It does not have the force of law at the level of the Central Govermnent, however, as it is still being studied by the Central Govermnent's Departments of Public

Works and Interior.

39. The 1957 Outline Plan stated in part:

"Djakarta is suffering g-reatly fromT urban decay, a fact which should be realized by all concerned. Every year this clty of ours sU.ffers: 8otne tths of times each year floods occur and f'ires break out, the traffic on roads is becoming rapidly more congested, and unauthorized buildings multiply on or at the side of main roads or rivers.3/...... X o . X ...... the problem of Djakarta may be summarized under four main he.adings' 1) There is insufficient productive employment for the citizons of Djakarta. 2) There a.'e too fiew decent hotes for the people. 3) There is hnad traffid congestion on the streets of Djakarta. 1h) There are too few social facilities like schools, mosques, shops, open spaces, c inics, etc., in Djakarta." 4/

1/ See Figure 3.

i,/ See infra, p. 27.

3/ Kenneth Watts et al, An Oit,Zine Plan for Djacartay 1967, p. iv2

4/ Ibid., p. 2. - 23-

40. If it had been added that the infrastructure is inadequate,

there are impediments to business expansion and the financial management

of the city requires strengthening, this statement would apply as well in 1971

as in 1957, though this is primarily a measure of the fact that cities

do not stand still; there is never a final solution.

141. Among other things, the 1957 plan proposed that new homes be

built at a-rate in excess of 10,000 a year, that new schools and market

places be constructed for each neighborhood, that a modern sewer system

be installed, that architectual controls be placed on new buildings in

the center of the city and that open space be preserved. None of these

recommendations has been carried out.

The Master Plan 2 h2. The 1957 Outline Plan and the subsequent Master Plan of Djakarta are based on the historic growth pattern of Djakarta. The oldest part of Djakarta is the Kota, pre-nineteenth century Batavia, located near the sea northwest of the geographic center of the city. The commercial center of the city, the Kota area is the most congested and unhealthy, the buildings are the most in need of repair or replacement. Planners have suggested that

the Kota should be redeveloped, that is torn down and rebuilt block by

block, though the costs, human and financial, of doing so have not been calculated.

SSee rigure 3, P. 78e - 24 -

43. The center of Djakarta is the Medan Merdeka, nineteenth and

twentieth century Batavia, now the primary center of government buildings

surrounding a great square with an imposing monument to Indonesian freedom.

South of the 1idan Merdeka is Djatinegara, an older market center, and

northeast is Tandjung Priok, the modern harbor. From north to south in 1957

the city measured 10 kn, from west to east, less than 5, within which there were open spaces, particularly around the airport at Kemajoran, built in 1938 midway between the Nbdan Merdeka and Tandjung Priok. The open spaces are no accident, for the area around the airport is marshy; it is hot, humid and unhealthy and ill suited to substantial building. It was because of these conditions that the Dutch moved their headquarters from the Kota to the

1dan Merdeka and that most subsequent growth has been, and will probably continue to be southward. A sort of underground ridge or shelf runs through

Djakarta (indeed along the north coast of Java) just south of the Medan

Merdeka, north of which the ground is swampy and unstable. Thus, for example, according to local authorities, the foundations of the "Sarinah!l, a fourteen- story government store near t4e Medan Merdeka required foundation pilings of

40 meters, while the Hotel Indonesia, of similar height just t ,o blocks south, required pilings of only 10 meters. 44. In spite of this important geologic and geographic fact, the

1957 plan proposed that the city of Djakarta should grow outward concentrically from the Kota-Medan Merdeka axis, and subsequent city - 25 -

planning has followed this concept. The Kota was to be redeveloped but

to remain the commercial center. The Medan Merdeka area (Gambir) was to be the government center surrounded by a multiple residential area --

the iIner city, and two lower density residential rings: the middle

city and the outer city. The outer city wias to be composed of planned,

high-quality residential villages or suburbs of 80,000 or so persons

each having its own markets, schools, hospitals, etc.

45. One such outer suburb, Kebajoran Baru, was still being constructed

in 1957 and has turned out more or less as planned, though its population

density is already greater than planned, and it is being infiltrated by

temporary housing and other extensions of the general poverty of the rest

of the city. Similar outer ring suburbs were to be built concentrically

more or less equidistant from the Kota-Gambir center of Djakarta, and this

intention is still indicated on the official 1965-1985 Master Plan. But

while spillover from Kebajorani Baru has induced residential development

in various directions from that suburl) (Kebajoran Lama and Slipi) and from

Teoht, soutmaest of the city center, the areas closer to the sea remain u.natt 1ractive and undeveloped despite the Mast.er Plan.

46. The 1957 plan proposed that a major highway be built from

Tandjung Priok to Djatinegara, continuing on in a ring around the city.

A "by-pass" road, the first part of this ring road, has been constructed,

and some development along it is taking place, though less than had been

supposed. An outer ring road was also proposed to serve industrial areas

.beyond a green belt surrounding the city. A new airport was proposed close - 26 -

to the sea west of the Kota, though the major development thrust of Djakarta

seems now to be southeast toward Bogor and the coole:,, healthier, lower cost,

more attractive and more stable foothills, the area where planners would

probably build a city if they were to begin in 1970 rather than 1610.

47. The 1957 plan proposed that industry be encouraged to locate along the sea between Tandjung Priok and the Kota, immediately northwest of the

city, and around the Kemajoran airport. The first of these -- Anjol -- has

been the subject of much attention by government officials. The city of

Djakarta has joined with private enterprise to form an Anjol Development

Authority. A plan provides 70 ha. for housing, 128 for 2.ndustry and harbor,

80 for bounded warehouses, 18 for hotels, shops etc. and 3,37 for a recreation

center. The trouble is that much of the area was a former swamp, and the

costs of preparing the land for development are substantial. Thus, while

some recreational facilities have been constructed, and water and power are

available, major industrial tenants have not as yet been notably interested.

48. Two new industrial areas have been added to the Master Plan. The

first of these -- Pulo Gadung -- is located east of the by-pass road in an

area scheduled to be served eventually by the Trans Java Railroads. Five hundred hectares have been zoned for industry, though only .5% has been

actually allocated to specific industries. Government officials believe that

this area would develop rapidly if infrastruct- e facilities could be provided and if the land could all be acquired from Indonesian owners at competitive

prices. Some of the land has been acquired by the city and is supposedly 27 -

available for use at a price no higher than $5 a sq. meter (roughly 50¢ a sq. ft.). But the unstable quality of the ground, and the relatively poor living conditions nearby make this development somewhat questionable.

49. The only area within the city limits of Djakarta which appears to possess unquestioned potential for substantial industrial development is

Gandaria located south of Djakarta along the Djakarta-Bogor road. About

4.3 ha. of the 200 ha. recently zoned for industry have already been allo- cated, and the following firms have established plants.

2252i2pdly Scq. M4eters 1. inclmcrilk 30,800 2. PiT Limasatu Sankyo Thcdustri Pangan 10,132 3. PT. Rena Djaja 8,8ho 14. PTi. Lansano 11 545 5. PT. Bayer Pharma Indonesia 32,100 6. PT. K i. w i 18,650 7. D u ine x 15,760 8. PT. G-ok "an Kiongsi 21,316 -?. liadibudiman 1C14,860 1o. P e b a ) a n 10,9t20 11. PT. (Carya Haksara 71,1466 12. PT. D)jakarta Tndustrial & Enamelware Factory 16,221 rT.P. Jetcn Intherniiitionan PO2000 rU()rpfI. L3,]T

50. On the west side of the highway, although not a part of the planned industrial estate, other modern plants have been established:

1. Mntrust Friesche Vlag Thdonesia 43,866 2. P.T. Pfizer Indonesia 37,890 3. Rheem & Co. 20,000 14.Ma_X Factor 9,867 5. P.T. Ciba Indonesia 550,000 TOTAL 161,623 - 28 -

51. The reasons for the success of this area are the lower costs of

new construction, the relatively good highway transportation, and better

living conditions. In general, living conditions improve as one moves

southward toward Bogor from Djakarta and the sea, and it would appear

reasonable to predict that future growth of Djakarta will. be southward

rather than to the east or west unless market forces are subverted by

government intervention. -

52. In a sense, the government of Djakarta is cauight between the

Master Plan and basic economic forces, and the conflict is probably slowing

industrial growth somewhat as the city modifies its plan slowly. The

development of industry, particularly foreign corporate industry, is im-

peded also by the basic land laws and buildings authorization procedures

described in a note at the end of this paper.-/

Land Prices

53. A substantial portion of the land in Djakarta is possessed outright by

the city government. It may be occupied by government buildings,, used private- 3/ ly under the rights of "hak guna-bangunan" or "hak serwa"l or be vacant.

The Djakarta Office of Land and Building Enterprise (Perusahaan torah dan

Banginan) seeks purchasers for the right to this vacant land, particularly

that which is located in the heart of the city. The asking price for the

latter is US $50 a square meter (US$5 a sq. ft.) plus a 10 percent entrance

fee. This is not unreasonable for vacant land in the heart of a major city,

1/ Significantly, the Directorate of City and, Regional Planning of the Cent- ral Government favors the establishment of an industrial estate further south outside of the city limits of Djakarta.

2/ See Note on Land Ownership and Transfer Laws, infra, pp. 55-60.

)/ See p. 56. - 29 -

though it may be that there are hidden costs which result from negotiations

over the widening of streets, the design of the buildings or the construc-

tion of additional facilities, (e.g. theaters or stores). In some cases,

moreover, the title to this land may not be clear.

54. Vacant land in the high quality residential suburb of Kebajoran

Baru is priced in the range of Rp. 5,000 to Rp. 15,000 a sq. meter

(US$1.30 to 3.90 a sq. ft.). Most of the land owned by the City of Djakarta

and planned for industry may be used for 30 years for US$5 per sq. meter

($0.50 per sq. ft.) but it is not competitive with land in Gandaria, the new

industrial zone between Djakarta and Bogor. Infrastructure

55. The most important categories of urban infrastructure to be

considered in Djakarta are flood control, waste disposal, water, power,

telecommunications and transportation. It should be stressed, however,

that none of these should be considered altogether in isolation. Alter-

native transportation systems are affected by the level of the water

table and by the te1ephonco, power and flood control systems. The flood

control system is affected by the water, power and waste disposal

systems. The water system is affected by the flood control, waste disposal, power and rural irrigation systems. All are affected by the housing system and by the land use pattern, and vice versa. The cost and proper location of an international airport affects anti is affected by all of these. The sum of the benefits of many infrastructure projects properly coordinated will be greater than the sum of the benefits of the same projects, each considered in isolation. - 30 -

56. This point may be illustrated with reference to the canals of

Djakarta which were built during the Dutch colonial period to receive discharge from kitchens and washing facilities and to provide some flood

control in the wet season and irrigation in the dry. Perfectly adequate for their intended. purpose when the population of Djakarta was 500,000 and they were properly used and maintained, these canals have become

choked with sediment., The canals are fed- by rivers whichi carry sedi- ment and debris, including garbage and excrement, from upstream. The

rivers are polluted (the water is, unsafe to drink) by the time they reach

Djakarta, and the canals are more so as they receive refuse from the in

habitants of the city.

57. Given the way in which they are used, the canals would be

filthy even if they were maintained. As, it is,. although they are flushed

somewhiat by water fr.rm the river system, they have become so clogged that

they never drain properly. In tlhe dry season the smalle.r canals become

smelly, quagmires; they are open sewers at their worst with all that implies for health (some of the street people drink from and bath in the canals) and the psychological malaise of the people. The canals no longer serve the purpose of flood control adequately so that transpor- tation in much of Djakarta virtually ceases and many. houses are flooded when the rain descends for long in tropical torrents. - 31 -

58. The Government of the Netherlands has financed the preparation

of a preliminary survey and recommendations for clearing and maintaining

(dredging and flushing) the canals, returning them to a properly main-

tained condition. But the consultant team warns that this urgent program

will be of only temporary value unless complimentary long-run measures are also taken. It is imperative that ways be found (e.g. barbed wire

fences along the canals) to keep people from using the canals for refuse.

The canal system must be substantially enlarged. In the longer run, drainage and flood control needs to be coordinated "with a long-run program for

the drinking water supply of the city and the new and necessary sewerage

systems for the septic disposal and conveyance of industrial and domestic waste water."

59. There have never been firm plans for a sewer system in Djakarta.

I-!hen the population of Djakarta was a tenth of what it now is, the city

government collected garbage and refuse from the permanent homes and es- tablishments most of which were also equipped with cesspools or septic tanks. The Indonesian Kampongs seemed too small to worry much about.

Today, however, waste disposal for a city of five million is a horrendous problem, one for which no one has a planned solution. If major

chemical producers should become interested in Djakarta, the problem

would be magnified.

60 . City trucks still collect some rubbish, though this has become a hit-and-*miss affair. The government does not attempt to pro- hibit individual rubbish burning,nor does it require all residences to be served by city rubbish trucks. The city has given up trying to collect rubbish coll.ection fees from residential establishments. But - 32 -

city rubbish collectors, underpaid, frequently insist upon a payment

directly to them before they will service the payor. Apparently there

are no private,competing,rubbish collection businesses, though the

existence of such might prove beneficial. Alternatively, the city

might insist that the employees collect rubbish from all establishments,

pay its employees Adequately, and add the cost to property tax rates.

It might reduca the costs of collection somewhat by arranging for neigh-

borhood collection points to which rubbish could be brought by a number

of families.

61. The question of a sewer system is riore dif'ficult. The city

might insist upon the installation of adequate septic tanks for all

permanent and semi-permanent buildings aid provide public facilities

with septic tanks in the temporary housing sectionis oDfDjakarta. This

could hardly be an optimum solution. It would be wo:rth investigating

whether the canal ditches could be used for a permanent sewer pipe in-

stallation and what the cost would be. It is possible that the experience

of Karachi, Pakistan, where a sewer systeM was installed at low cost

using underemployed labor and Karachi-built sewer pipes would be in- structive for Djakarta.

62. One difficulty with the' septic tank-cesspool sewer solution

is that it would cont.i-.,nate the underground. water which might otherwise

be pumped from shallow wells and used with a minimum of filtration. The water table, of Djakarta is ju8t below the surface, and only the water

from deep wells (over 100 meters) is sufficiently separated from surface waters to be uncontaminated. Unfortunately,. the water from deep wells bears traces of Indonesia's volcanic past: the water is warmi and is said

to have a high carbotic acid content. Nevertheless, it might be worthwhile - 33 -

to study the possibilities of pumping, storing and filtering increased

quantities of underground, and even surface water, partly to reduce the

water table and the flood control problem if this is possible without the

underground encroachment of water from the Java Sea.

63. A more probable solution was proposed in 1963 by Nikon Suido, a

Japanese consultant firm, that water be brought to Djakarta from the Tjisadane

River upstream at Gobang. The Tjisadane River is the largest of the rivers

which flow into the Djakarta basin. It is located 20 km. west of Djakarta and is thoroughly contaminated when it reaches the sea. Upstream the

water is fresh, however, and the volume is sufficient to provide, together

with existing sources, enough water for five million people at the ample

rate of 325 to 350 liters per person per day. Unfortunately, the

estimated cost of this project in 1963, including the cost of fixing

and/or replacing pipes in the existing delivery system in Djakarta,

installing new meters and renovating the Pedjompangan filtration plant

was in excess of US$150,000,000. The plan was not carried out and would, of course, cost more today.

64. Since 1963 the existing treatment plant has been repaired some- what with funds from the central government, and the Djakarta government has sunk a few wells whose pumps operate with wind power. But the system is basically the same, only older. Trne pipes in the distribution system need replacing as do the trunk line pipes which should be considerably larger. The meters at the filtration plant and at the user end of the system need to be replaced. Without meters the proper collection of water charges is impossible. Basically, however, the system needs to be en- larged and new, less polluted sources of water need to be found to sup- plement the good water now coming from springs near Bogor and mixed with - 34 -

meetings and adds to traffic problems. The telephone system is currently being studied by British and Australian management consultants. it would appear that it will be expanded and improved in the foreseeable future. 69. For all of these -- water, power, and telecommunications --

collection is a problem. Partly becauste the mail system i. undep*pridalble and partly because relatively few Indoniesians maintain commeorcial bank accounts, the delivery of bills is never by mail and the paymitlt., seldom.

Sometimes collectors go door to door, but even that is unreliable. The surest method is for the user to send a messenger to the relevant local office of the water, power, or telephone company, request a bill and, if it is found, ,make payment. Sometimes the messenger has to return several times. The system would be improved if the date on which bills were available were well-known and dependable and if there were a single office for the payment of all bills including, perhaps, rubbish collection and radio, television and property taxes a well as water, power and telephone rates.

70. A final element of -infrastructure 'to be considered is the air- port. It is probably important to the fpture of Djakarta', and, indeed, of Indonesia that the ai_rport be able to service larger and faster planes.

The present airstrip is inadequate part.ly because it is too close to the -35

Consumption Electric Powejpaartal199-970 (In Kilowatt hours)J

Year Year

1959 159.377.104 1965 310.192.699

1960 180.473.905 1966 347 r596.596

1961 210.335.957 1967 370.927.286

1962 210.334.547 1968 403.581.010

1963 238.320.692 1969 415.640.393

1961 271.507.633 1970 435.969.647

Source: Perusahaan Listrik Negara E&ploitasi XII

67 New users are not sought: they simply increase the probability of power failure for existing users. Thus, prices charged for new in-

stallations may be as high as US$4,000, and the rate structure is arranged

so that marginal rates increase with the quantity of power used. The

impact on new business investment is obvious, though installation

charges and rates will become more rational as the capacity of the system increases.

68. The same comments may be made about telephone installations.

A new telephone costs at least 100,000 rupiahs ($260) and is impossible to obtain without an additional negotiated payment to relevant personnel. Among other things, this increases the need for face-to-face meetings and adds to traffic problems. The telephone system is currently being studied by British and Australian management consultants. It would appear that it will be expanded and improved in the foreseeable future.

690 For all of these -- water, power,, and telecommunications -- collection is a problem. Partly because the mail system is undependable, and partly because relatively few Indonesians maintain commercial bank accounts, the delivery of bills is never by mail and the payment, seldom.

Sometimes collectors go door to door, but even that is unreliable. The surest method is for the user to send a messenger to the relevant local office of the water, power, or tel2ephone company, request a bill and, if it is found, make payment. Sometivmes the messenger has to return several times. The system would be improved if the date on whi-ch bills were available were well-known and dependable and if there were a single office for the payment of all bi:lls including, perhaps, rubbish collection and radio, television and property taxes as well as water, power and telephone rates.

70. A final element of irfrastructure to be considered is the air- port. It is probably important to the future oIf Djakarta, and, indeed, of Indonesia that the airport be able tQ service larger and faster planes.

The present airstrip is inadequate partly because it is too close to the - 37 -

center of Djakarta, hitherto an advantage, and partly because the landing

strips require reinforcement, the cost of which would be higher than would be the case further south where the ground is less swampy. The latter

consideration would apply equally to possible sites west and east of

Djakarta near the sea.

71. An American engineering firm was at work in late 1970 on an

airport feasibility study considering alternative sites. The findings will be available in 1971, though they may be academic since the cost

of a new international airport would seem to be beyond the immediate

financial capability of the Indonesian Government. In any event, a new airport from the initial planning to completion could require as long as ten years, so change is not imminent.

Surface Transportation

72. It is generally accepted that Indonesia as a whole has a well planned though poorly maintained transportation system. The rail link between Djakarta and the other major cities of Java is good, though some bridges and stretches of roadbed need replacement, and the rolling stock needs renewal. In and about Djakarta, the road system is being improved, though not as fast as vehicular population.-/ The capacity of the

1/ See Table 8. - 38-

existing Djakarta-Bogor road is clearly inadequate, and a new road is being planned.

73. Within Djakarta, the length of existing roads rose from 882 kilometers in 1967 to 993 in 1969,-/ and major thoroughfares continue to be widened and otherw.ise improved. S,ince 1967 over half the develop- ment budget of the city of Djakarta (one-fourth of the total budget) has been ,spent on roads, though it has been estimated thiat the length of paved roads must still be doubled to handle existing traffic. Nearly htO percent of all the motor cars and 20 percent of all the trucks and buses in Indonesia are in Djakarta. 74. Some indication of traffic densities along major thoroughfares, is given in Table 9, though this cannot begin to describe the unregulated maneuvering, weaving, stopping, turning chaos of cars represented by the numbers. Lesser streets, surrounded by merchants displaying their wares, in carts and on sidewalks and dirt banks, are choked with horsecarts, bet- jaks (tri-cycle taxis), pedestrians and men carrying pots or other materials at both ends of poles balanced like scales on their shoulders.

An official city publication affirms that it may take automobile traffic an hour or more to transverse a distance which should require 15 minutes.

1/ The most important new roads built in Djakarta since World War II have been the by-pass road from Djatinegara to the harbor and the road linking Kebajoran to the rest of Djakarta. - 39

75. In addition to widening major roads, the city has induced

Drivate firms to constru.ct pedestrian overpasses across highways in return for the exclusive right to advertise their wares on the overpasses for five years. Private firms with similar inducements have also con- structed some 330 rain shelters for passengers awaiting buses.

76. Street maintenance and widening is only part of the more general transportation problem in Djakarta. A private bus company under license from the city and with an AID loan guaranteed by the city of Djakarta has added 500 buses to the 1,000 in operation in 1968, and another 500 are due in 1971. It is estimated, however, that a total of 3,500 are needed. An improvement in the public transportation system is required for reasons of efficiency (most government agencies send small buses to pick up their employees as do most foreign firms and embassies) and to reduce the dependence of many on betjaks, the ubiquitous pedi- cabs which swarm the streets of Djakarta, providing employment for the drivers but creating traffic problems and raising the costs of intra- city travel.

77. Betjak transport costs several times more per passenger kilo- meter than does bus transport. (Bus fares recently raised from 10 to

15 rupiahs are fixed at rates which require almost constant use and full loads for the bus company to break even). Betjaks are slower and more The dangerous than buses, and they creaz;e substantial traffic problems.

Governor of Djakarta htas proclaimed that no new betjaks may be built, and run as all. betjaks must be lic:ense,i. Th;,imates of the number of betjaks - ho -

high as 200,000, though less than 100,000 have been licensed to date.

Doubtless, they could be phased out faster if alternative employment were readily available for the 200,000 to 400, 000 drivers each of whom probably earns US$100-150 a year.

78. Another transportation problem is the shortage of taxis. It is estimated by city officials that there are only 200 taxis in Djakarta as compared with 5,o00 in Bangkok. The taxi shortage requires compaty executives and government officials who attend many conferences (partly because of the shortage of telephones) to have automobiles and drivers, and this adds to traffic and parking problems, now becoming acute, and to the cost of business and government operations. Under the circumstances, it is probably reasonable for the city of Djakarta to place Major emphasis on roads and traffic control, for the automobile may choke this city as it has so many others.

79. Djakarta is served by a rail system linking the central station and the harbor via a sort of circle routs! There has been some consider- ation of discontinuing this line partly because of the grade crossing problem. Trains may interrupt vehicular traffic for long periods. Given the problems of traffic already evident in Djakarta and the experiences of some cities which have abandoned rail lines altogether in favor of the automobile to their subsequent regret, it would appear advisable for the city and central governments to dismantle the intra-city rail system only after itnich thought. They may wish to move toward a total improvement of transportation which will integrate all the relevant forms of urban transport. - 41 -

80. It is none too soon, moreover, to begin asking serious questions about air pollution. The absence of strong breezes and the ubiquitous cover of low hanging clouds during much of the year appear to create con- ditions favorable to classic automobile air-pollution in the not distant future. Already the mountains to the south, visible after a hard rain has extinguished for some hours the thousands of open household fires, are enshrouded almost permanently in smoke from crowded human habitation.

Government 81. The improvement of public utilities and transport facilities

and the regulation of land use and new industrial construction in the

Djakarta area depends upon government. An understanding of the structure

and budgetary problems of government is essential, though it is difficult

because the relative responsibilities of the city, regional and central

governments are not altogether clear, and because personalities are not unimportant. 82? In the sense of everyday habits, customs and loyalties of the

people, Indonesia is decentralized. Identification with Bali or Jogjakarta,

with family or village, or with social class or occupational group is strong. In a sense of public finance and governmental authority, however,

Indonesia is centralized.

83 . Indonesia is divided into 26 regions or Daerah, each of which

has its own Daerah or provincial government. Two cities -- Djakarta and

Jogjakarta -- are also regions or Daerah presided over by a gover'ior appointed by the President of Indonesia. The other cities are subsumed under one or

another of the other twenty four Daerah. They do not stand high on the

administrative and financial ladder. 84. In addition to being a special province, the city of Djakarta

is the seat of the national government. As it happens, the Governor of

Djaklarta, Lt. General Ali Sadiken, is also a significant national political

figure, and it would appear that he derives a substantial amount of his power from his personal rather than his legal authoritv.

85. The legislative body of Djakarta, the "Gotong ijbjonrgl or Regiolual

House of Representatives., is composed of 37 members chosen so as to repre-

.ient various political, religious and occupational groupings in Djakarta.

Like its counterpart at the national level, the .deOgional House of

Representatives passes basic laws which are, suppleimiented from tlime to

time by the proclamations of the governor.

86.. There are no rural sub-regions (Kabupatenl) in. Djakarta, though

agricultural output comprises about 10 percent of the total output of the

province -- more than industry, but thiere are five mtunicipalities in Djakarta

each with its mayor (Wali Kota). Thus, Djakarta may be thought of as a

metropolitan complex as well as a capital city.

87. Tle municipalities of Djakarta are further suibdivided into administrative

districts and subdistricts comprised of about 200.,000 and lI,O000 inhabitanits

respectively. The officer of each district is a Tjamat who,- among other things, may arrange for the transfer of land title. There are 50 Tjamat in Djakarta.

. ,*...... I, The officer of a subdistrict or Kelurahan is the Lurah, an important local leader appointed 'by the Governor., and respansible, among other things, for issuing citizenship cards to the inhabitants of his sub-

district. For every 20 families there is also a neighbors' represen- tative (Rukun Tetangga or RT) and for every 20 such neighborhoods there is a families' commmunity representative (Rukun Warga or RW). The RT and the RW report to the Lurah, so to speak, thus guaranteeing a flow of in- formation and authority upwards and downwards in the total administrative system.

88. Electric power is provided in Djakarta as elsewhere in Indonesia by a national public utility. So is telephone service. Capital i4provemnents in the Djakarta water system are the responsibility of the cntral govern- ment, though it is a city managed utility. Capital expenditures for

primary education and for major roads are the responsibility of the central government, though most of the actual improvements within Djakarta in recent years have been financed by the aLty government. 89. Djakarta has its own Master Land-Use Plan, though its force as an instrument of control seems to depend more on the personal authority of the Governor of Djakarta than upon any clearcut urban land law or provincial authority. The govenament of Djakarta lacks the authority to condemn private property (hak milik) for public use by compensating the owners at fair market value (the right of eminent domain). Only the President of Indonesia can authorize the acquisition of property for the public welfare with fair compensation determined by an appointed boarx. The governor and his - 4h - staff have been successful in inducing property owners to donate frontage land to the city for street widening purposes. The government may also purchase land for resale to industrial or large commercial enterprises. Occasionally, it is reported, the government will offer for sale land which it has not yet bought, presumably intending to buy the land subsequently at a "negotiated" price.

90. There are a number of agencies in Djakarta having no duplicating or counterpart agencies in the national government, e.g., the fire brigade or department and the land registration office. There are a number of other agencies which are essentially Djakarta branches of the relevant national agencies, e.g. Department of Public Works and the Bureau for Statistics and

Census. Increasingly these agencies report primarily to the Governor of

Djakarta, though it is said that a cooperative arrangement exists between the

Governor and the relevant nati-onal Directorate General, The system would be more rational, the redundant government employees would be easier to identify, if a single line of authority were specified by law,

91. From the standpoint of revenxue, the provinc..al governments are extraordinarily dependent upon the central government. In 1969/70, the tax revenues collected by local and regional governments accounted for only 1.4 percent of the total collected in Irndonesia 2/ though this calculation depends in part on the definition of the level of government for which tax collectors work. Many civil servants are employed in offices which are provincial as ,well as branch offices of the central government, and they are paid by the provincial government from central government funds. Lines of authority are blurred. In theory, for example, all of the land tax (Ipeda)

1/ See Table 10. - 45 -

collected in a province is collected by the central government and turned over

to the provincial governments (10 percent) and to their sub-regions (90 percent) for their development (capital) purposes.

92. In addition to the land or real estate tax, the central government has collected for local and regional governments a tax on exports (ADO)9and

it has made annual subsidy contributions to the provinces and their sub-regions2

based on a formula which takes into account population, public employees, area,

roads, and rice fields.-!/ Since few revenue-producing possibilities are left to the provinces,-/unless they add sur-charges to the charges of the central govern-

ment, they are very much dependent on these contributions plus Ipeda and ADO. So, of course, are the sub-regions of the provinces, including the municipalities. 93. Some cities add to their revenue by a variety of special taxes, but this "maze of tax regulations is administered in haphazard fashion, leading to understandable taxpayer complaints. The evidence strongly suggests that the generation of additional revenues in the future will depend not on the use of new taxes, but rather more effective administration of those tax laws already enacted." 6/

1/ See Table 11. For some years the entire export tax paid in foreign exchange was turned over to the province from which the goods were actually exported. Largely because of' controversy amongst provinces of origin and of actual export, this practice has been changed. The central government now pays in .indonesian currency an amount equal to 105 percent of each provinces' 1969/70 AD), receipts, and it intends to supplement these payments in the future with special subsidies to make up for inequities arising from the origin of the ADO payments. 2/ See Table 12.

3/ The subsidy contribution is determined by the following base: Number of population 17.90% Number of officials and pensioners 16.02% Area of region 24l11% length of ways 23.69% Area of rice fields 1)4.98% Special characteristics (only Djakarta) 3.30% IJ See Table 13. c: See -?'ab; '. R.R/ Stafford S3ith and Theodore M. Sm.th, "The Political Economy of Regional and Local Finance in Lndonesia," August 1970 (mimeo), p. 16. - 6 -

Revenue

94. A measure of the success of the present government of Djakarta

is that annual budgets more or less doubled in real terms from 1967 through

1969 and increased again by 50 percent in 197(.

95. The government has succeeded in increasing revenues in recent years by bargaining successfully with the national governmernt for a

larger subsidy, by authorizing a government lottery and by legalizing

and imposing a tax on gambling. In 1969-7(, 25 percenit of the revenues

accruing to Djakarta resulted from the lottery and the gambling tax.1/

It was shrewd for the government to have devised a gambling tax in the

first instance, for many of the gamblers are foreigners, some of whom

fly to Djakarta from Singapore for overnight entertainment. It has been

politically astute for the government to maintain gambling in the face

of opposition by some religious leaders. Similar operations in Makassar

and Medan were obliged to discontinue; the casino in Palembang was burned

to the ground and the homes of the employees were ransacked.

The Development Budgt

96. Roughly half the budget of Djakarta is earmarked for development,2

though information on specific project expenditures is not available. Five

year (1969-1974) targets have been set for hospitals and clinics, schools,

roads, water, power, flood control, public transportation, traffic control

and waste disposal, but the authority for meeting these targets is confused.

1/ See Table 15.

2/ See Table 16. -47 -

97. Reforms are needed if Djakarta in particular and cities in

general are to become more important in the development of Indonesia.

Administratively, more mayors must have more authority. Finan-

cially, cities need direct control over more of their sources c'f revenue.

In particular, cities should be allowed to assess the value of real

estate and buildings in their jurisdictions, establish real and personal

property tax rates and collect these taxes if they wish to do so.

98. It might also be desirable to modify the presumed relation

between some taxes and city budgets. At present there is a presumption

that the real estate tax collected by the central government is used to

finance regional and municipal development (IPEDA and IREDA are acronyms

for phrases meaning contribution for the rehabilitation or development

of a region), while the central government subsidy paid from general

funds is used to finance current or routine expenditures (public employees

are paid by the central government). The reverse might be more logical:

property tax payers in major cities should perceive that their tax pay- ments finance routine local government operations which benefit them currently and directly, e.g. city administration, the maintenance of local streets, rubbish collection, the protection of property from fire and other damage, etc., while the central government shou.d carry out the planning and financing of major improvements on a regional and national basis, taking account of population growth and locational growth priorities. 4 8 -

99. In any event, the administration of property tax assessment and collection needs to be substantially improved. The costs of ad- ministering the Djakarta property tax branch of the national Ministry of Finance in 1969 has been estimated to be US$0.38 for every $1.00 tax revenue collected, though the additional costs of collecting additional taxes might have been much lowker. A part of the problem stems from the fact that taxes, like charges for rubbish collection, are collected in part by agents who go door to door. This system has obvious dis- advantages. Many private tax payers pay nothing at all, and most pay little. Furthermore, the impact of the real estate tax falls

1/ Smith, op. cit., p. 47. 49 -

disproportionateJ,y upon business enterprise.-1

100. Competent property tax and assessment consultants are needed

to recommend ways and means of improving the assessment, collection and

accounting of property taxes in major Indonesian cities, beginning with

Djakarta.

1 According to Smith, op. cit., pp. 39 and 40: "(In Djakarta) Houses are not taxed. The maximum assessed value of land according to present re- gulations is Rp 600 ($1.60) per square meter while in fact some land in the city is selling for Rp 60,000 ($160.00) per square meter. Three spe- cific examples reflect the fact that property taxe.s as a percentage of real market valuie are very low. The annual property tax on a house and land valued at $28,000 in Djakarta's nicest residential section is $7.25 (.026 percent). Another piece of residential property assessed at $135,000 is subject to an annual property tax of $15.20 (.011 percent). The Hlotel Indonesia, with a market value of about $5 million, paid a property tax of $4,650 (.093 percent) in 1.969. In a city of more than 5 million people there are only about 140,000 individuals and businesses upon whom property taxes were levied in 1969, and only a very small percentage of these actually remitted payment. The following breakdown shows this (source: City Inspection on Land Tax):

No. of Tax Z of Levies Type of Property Obligations Collected

Rural 74,804 9.53 Residential 22,748 25.54 Commercial 41,816 47.05

The 313 full-time and 978 part-time employees involved in property tax administration raised only $535,793 for the city in 1969, while the 297 officials of the Djakarta Tax Service raised $7,194,908--13 times as much. Moreovcr, our calculations indicate that the cotit of collecting IREDA is about 35 percent of gross receipts. No penalties are currently being applied to delinquent taxpayers. Though commercial, and industrial build- ings are subject to tax, the IREDA Office has no -system for monitoring new construction. The Department of Ptublic Worlks issues building per- mits, but the IREDA Office ha.s not yet requested copies of these permits". 50 -

Conclusions and Recommendations for Additional Research

101. Djakarta illustrates the conflicting forces at work in the

major cities of most less developed countries:rapid urban (i.e. infra-

structure and population) growth seems warranted, since national development requires a major urban center or centers which can provide

the external economies necessary fcr industrialization and the central city

facilities appropriate to lowest cost urban spatial relationships,

but the quality of urban life appears to be declining for a larger

absolute number of people as public facilities and services expand

less rapidly than the population and as facilities which cannot be expanded except at higher and higher cost are used more and more inten- sively and, therefore, less well on a per capita basis. Put more simply:

the continued rapid growth of Djakarta would seem to be the proper

resultant of some forces and the improper cause of environmental

degradation. Djakarta illustrates the dilemma confronting mankind as the Malthusian specter of overpopulation becomes more real. 102. It might be supposed that national priorities should be shifted so that public expenditures in Djakarta might be substantially increased. Some level of expenditure could provide the electricity, water, waste disposal, flood control, transportation, communication, education,health and housing systems needed to enable new industrial plants to expand rapidly at costs circumscribed only by their own internal efficiency and the size of the market. Similarly, some level of expenditure could

provide the electricity, water, waste disposal, etc. plus the culture and

recreation, the architectural and pollution control, the beautification,

welfare, crime and fire protection, and the open space and orderly land use

needed to optimize the quality of life for the residents of Djakarta,

given their income.

103. Obviously, however, expenditures of such a magnitude could

not be justified by any reasonable analysis of national priorities.

From the point of view of real national output, rates of return on

investments in other locations and sectors might warrant priority for those investments over additional public investments in Djakarta

long before the supply of social overhead capital had become so great

that its short run elasticity was infinite. Similarly, from the point

of view of real national income, the economic demand for public goods

available elsewhere than in Djakarta would warrant some public expen-

ditures in those places long before all the shortages of amenities in

Djakarta were removed.

104. This is to say no more than that Djakarta will tend to be a

low income city as long as Indonesia is a low income country. It does

not deny the need for additional research to improve national planning

and administration in the interest of growth or equity or both. Indeed,

it would appear,' that Djakarta in particular and cities in

general have received too little attention in analyses of Indonesia's

projected development. to 105. Some general questions may be posed. Does the rapid migration of labor Djakarta imply that wages and, therefore, the marginal productivity due to unfulfill- is higher in Djakarta than elsewhere in West Java, or is it such as able expectations, to market aberrations, to uneconomic employment of public monument building or make-work schemes, or to an undue subsidization to other cities? facilities and amenities in Djakarta absolutely or relative Indonesia as a Is the relatively slow growth of industry in Djakarta (and in disadvan- whole) due primarily to institutional constraints or to locational in Djakarta tages? Which central place economic activities must be located West Java in to produce lowest unit cost output in Indonesia as a whole and of further particular? What is the social cost to the existing population

population growth? Does the 106. A number of questions relate specifically to Djakarta. an increase scarcity of public facilities and amenities seriously constrain most dis- in labor productivity? Which infrastructure shortages are the use laws and couraging to new productive investment? How might urban land productive the long-run land use plan be modified to encourage more rapid, to the but orderly development? Are attitudes and ideas being modified

national advantage because of the urban enviromnent of Djakarta? impossible. 107. These questions are not easy to answer; some may be develop- But they get to the heart of the impact of major cities on national

ment. They deserve attention. 108. Two specific research projects appear relevant, useful and

possible. The first would be an inquiry into the reasons for migration

into Djakarta, the second, a comparative evaluation of the central place

and economic base characteristics of Djakarta and Bandung.

109. In 1954 a house to house survey of 11,700 households in sixteen

Kampongs in the most densely populated Kelurahan of Djakarta was conducted

by students of the Djakarta School of Economics under the direction of the

Institute for Economic and Social Research of the University of Indonesia.

This valuable study provided information as to the dates and places from

whence migrants came, their families, and their employment before and

after migration. Unfortunately, the questionnaire did not uncover much

information as to changes in income or living conditions as a result of migration. A new survey, similar to the first but pointed a bit more toward issues of motivation and economic conditions, might be desirable.

Migration is a significant economic and social phenomenon and warrants

considerable investigation if planners are to take proper account of the location of new investments.

110. Bandung and Djakarta are roughly 100 miles apart. They are both

central places, though Djakarta has grown a great deal more than Bandung since 1915. Why? Has this been the inevitable consequence of market forces

operating to produce a lowest cost spatial solution, or is it, at least

partly, the result of institutional decisions some of which could have

been different and could have produced better economic and social results. At one time, the central government of Indonesia seriously considered locating some of its offices in Bandung rather than in Djakarta. The prestigious Indonesian In titute of Technology is located in Bandung. The climate of Bandung is more temperate and healthy, at least for those having adequate housing. Could some of the economic base of Djakarta (e.g. several offices of the central government) be transferred to Bandung,thus decreasing somewhat the population pressure on Djakarta, without adversely affecting the economic linkages now existing or developing in Djakarta? Does the economy of

Indonesia require that Djakarta continue its rise to the position of a primate city even if present trends indicate that the population of Djakarta will reach 10 million before 1985 and that many people then may live in less happy circumstances than those presently im- poverished in the city?

111 In attempting to answer this kind of question, a research team would be obliged to obtain detailed information concerning the linkages and the externalities of economic activities in Djakarta. Similar infor- mation would be needed for Bandung. It would be a substantial undertaking and, like the migration investigation, might best be undertaken over time with the assistance and cooperation of the faculties of the University of

Indonesia and the Institute of Technology.

112. Djakarta represents a paradox of sorts. On the one hand it is growing too slowly. It is the optimum site for many central place activities and, therefore, for much of the potential economic development of indonesia.

If the painfully slow growth of Indonesia's per capita income is to be accel- orated, particularly if industrialization is to be important, the capital stock of Djakarta must grow faster. On the other hand, the population of

Djakarta is already too large and is growing too rapidly relative to the available public facilities and seivices and the capability of government to manage the system. as 113. The explanation of the paradox is not obscure. In Djakarta, is in the whole of Indonesia, capital and management are scarce; so also public willingness to endure the present as a precondition of a better future.

114. In Djakarta, as in the whole of Indonesia, investment in public facilities is required and the impediments to productive enterprise, public or private, must be removed. Strategy for maximizing the growth of Indonesia as a whole may preclude the consideration of Djakarta, or any other city, in isolation. Investments in irrigation, transportation and communication must be compared with investments in municipal water, power, roads, waste disposal, education and housing. Investments in

Djakarta must be compared with investments in Surabaja, Medan, Makassar or Bandung. But national strategy precludes ignoring Djakarta and the other major cities of Indonesia. They are relevant as entities in national growth, and they cannot be understood unless they are analyzed not only as entities but in terms also of their component parts, City. the separable pieces which collectively comprise the organism we call a

A Note on Land Ownership_and.Transfer Laws and Building-Procedures 115. The philosophy of Indonesian land law is that all the land is agrarian and is owned collectively by the people, i.e., the state. Land in cities as well as the countryside is administered by the Director General of Agrarian Affairs. Legislation pertaining to land use is set forth in various agrarian acts such as the Basic Agrarian Act No. 5, 1960, adopted on September 24, 1960, which defines land rights, the most important distinction being that only Indonesian citizens may use land in perpetuity -- may exercise "hak milik". This was a reaffirmation of traditional Indonesian

custom or 11adat" law and was a denial of colonial law under which Europeans

"owned" land (possessed "Hak eigendom") in cities and agricultural estates.

The basic Agrarian Act was supplemented in 196 4 but specific urban land legislation has not been considered by the central government.

116. The following land rights are spec4fied in the Agrarian Act of 1960:

(a) "hak mflik"

(b) 41hak guna-usaha"

(c) "hak guna-bangunan"

(d) "hak pakail

(e) "hak serwa"

(f) "hak membuka tanah"

(g) "hak memungut-hasil hutan"

117. For all practical pLrposes, "hak milik" confers uponi the possessor the same control 6ver land as is customarily associated in the west with the so-called right of private property. It may be held only by private

Indonesian citizens. Hak milik may be transferred or inherited or morgaged, though only by private Indonesian citizens. It could lapse if the land were neglected. 118. All the other rights to land are circumscribed by conditions such

as the manner in which the land may" be used or the time period of its use.

The government requires that each land contract be authorized, and this

procedure can be the cause of much delay, frustration, bargaining, red tape and, perhaps,v corruption.

119. "Hak guna-usaha" is the right to cultivate land for up to 25 years. If the capitallinvestment required of the user is substantial,

as may be true if more than 25 ha. are involved, a 35 year period can

be granted. "Hak guna-usaha" may be transferred, but may only be

possessed by Indonesian citizens and corporate bodies established under

Indonesian law and domiciled (having an office) in Indonesia.

120. "Hak guna-bangunan" is the right to construct and use buildings on non-owned and, therefore, government or on "hak milik' land for a period of 30 years. It may be extended by the State for an additional 30 years. This right may be held by Indonesian citizens or corporate entities domiciled in Indonesia. This is the right -which is p.r :',ased by foreign industrial companies operating (domiciled) in Indonesia. They may purchase this right from private Indonesian citizens who possess "hak milik" or, from the government. It may be that the industrial companies must negotiate both with private citizens and with a government entity. It may also be that "hak milik" passes from private Indonesian citizens (is abandoned) as part of the transaction. In this case the land becomes government land at the end of the relevant time period. 121. "Hak pakai" is the right to use or to gather the product of

land directly administered by the State.

122.! 'Hak serwal' is the right to construct buildings on government

or 'tlilik" land or "guna-bangunan'l land and for which the possessor

pays rent. It mayVp exercised by resident aliens and foreign

corporations aes wl as by Indonesian citizens. 123. "1Hak membuka tanah den memungut hg,sil hutan" is the righit to colTect forest products. "Hak guna-air" is the right to obtain water.

t'Hak guna-ruang-angkasa" is the right to i4se power and elements in the air. "Hak Tanggungan" is the right to pqspsqsp a mortgage claim against land used by those possessing fiilik"lj 91gurna uwsahaj' and "guna-bangunant.

12h. The upshot of this legislation is that no one owns any land absolutely, only Indonesians may use land in perpetuityi, and the Dir,ector

General of Agrarian Affairs of the Central Goyernment or his delegated authorities must approve all the transfers of the various rights to land.,

125. In theory all differences of opinion As to land title. Qr Us.e may be adjudicated through the national system of courts, and for thWe,mpst part this works out in practice, though there may be substantial delays. (some cases have been pending for 10 years.)

126. The first legal step which must be taken by anyone desiring to obtain a right to land in Djakarta whiph Ie has foun4 suitable for his, purpose and whose owners have been found is to request permission from the Chief of the Agrarian Section of the Djakarta Municipal authority to pur-

chase an appropriate right to the land. If the request is proper, a permit to transfer use (one might say "title") from seller to buyer will be granted. The time taken for this step may be a month.

127. The second legal step is registration of the transaction (one might

say "deed") with the land registry office of Djakarta, a municipal provincial office which has proper maps of surveyed plots in the area. This normally takes about three months and requires the payment by the buyer of a fee which may vary from 3 percent to 10 percent of the total selling price.

128. The legal documents which must be submitted to the Agrarian Department and the Land Registry Office are prepared by specific

legal officers. In Djakarta, this function is performed for the most

part by Notary Publics appointed by the Minister of Agrarian Affairs.l/

Deeds of land transfer and Certificates of Title may also be drawn by

a few retired civil servants specifically appointed by the Ministry of

Agriculture and by the various district chiefs or Tjamats.

1/ Notary Publics are attorneys or solicitors who have suceessfully passed at least the second of three major examinations given at the present time by the Ministry of Justice. In the whole of Indonesia, some 150 notaries have passed the second examination and are licensed to practice. In Djakarta there are 48 notaries, all but eight of whom have passed. Yr three.examinations. The remaining eight are preparing to '.-. the third examination which they must pass in 1971 if they are to keep their licenses. After 1971 the state examinations will be abolished and examinations will be given instead by the law faculties of the University of Indonesia and the University of Padjadjaran in Bandung only to qualified. graduates of those law schools. - 60 -

129. Before building construction is legal in Djakarta, two additional governrment offices must be contacted. The Planology or Town Planning Div- ision of the Office of Public Works munst determine that the U of the lnd conforms to the Master Plan of Djakarta. Specific building plans must also be approved by the Public Works Department of Djakarta. The Public Works

Department deals with regulations on foundations, type of material, height, setbacks, design, etc. Final approval is not issued until the building is completed, though constant communication between thi.s department and the builder is usual. There i some evidence that the eimployees of this depart- ment can be capricious in their requirements.

130. There is a published building code, but it is difficult to obtain.

131. Collectively, the various land acquisitiorn and building approval requirements present a substantial hurdle to a neo industrial investor, whether foreign or domestic. It may take siz months to a year for an inveator to get past this hurdle after his resclution is fira and before his plant

construction can begin. 61-

Table 1: POPULATION INCREASE; CITIES OF 100,000 AND OVER IN 1968; 1961 to 1968

Population % Change City as %of Province Province or1Ct961 1 1961-1968 .1961 1968 ( s ooo ) -,

Djakarta Raya 2s973.1 4h500.7 51 100 . 100

West Java 17,61l.5 20,800.0 18 - -

Bandung 1s032.1 1,164.8 12 5.6 5.6 Bogor 154a1 180o0 16 0.9 0.9 Tjirebca 158.3 185.0 28 0.7 0.9

Central Java 18s4io7.5 209003.0 8.6 - -

Pekalongan 102.4 108.3 6.6 0.65 Semarang 503.2 614i.2 22 3.0 3.0 Surakarta 367.6 395.5 7.7 1.9 1.9 Tegal 89.0 103.5 15 0.5 0.5 JogJakarta 312.7 396.3 27 - - East Java 21,832.0 25,879.0 18-5

Kediri 158.9 185.9 0.6 0.6o Kadiun 123.4 155.2 18 0o4 0.6 al ang 341.5 405.2 18 1.4 1.5 Surabaja 1,007.9 1,195.0 18 4.6 4.6 South Sumnatra 4,847.2 n.a. n.a. - -

Palembang 475.o 630.2 32 n.a. n.a. Tandjung K.rang/ TL. Betung 134..0 213.0 58 n.a. n.a.

Djambi 744.4 882.0 5.2 - .

Djambi 113.1. 132.6 17. 15 16 West Sumatra 2,319.1. 2,762.3 19 -

Padang 1243.7 215.8 50 6 10

North Sumatra . -4,964.7 5,936.6 19 - I4edan L479.1 - 572.9 19 9.5 9.5 Pematang-Siantar 114.9 137.3 20 2.2 2.3 -62.-

Table 1 (cont'd)

Populaticn % Change City as % of Province provnce it1961 1966 1961-1968 19611 ('oooT-

West Kalimantan 1,581.0 2,179.9 38 - Pontianak 150.2 213,8 42 9.3 9.7

South Kalimaantan 1,t473.2 1,820.0 24 - BandJamasin 217.1 292.3 34 14 14

East Kalimantan 550.8 723.1 31 -- Balikpapan 91.7 153.5 68 17 22 Samarind.a 69.7 11203 62 13 16 North Sulawesi 1,310.1 1,502.6115 Nenado 129.9 137.5 6 10 9 South Sulawesi 4,703.6 5,532.4 17 l4akassar 384.2 441.3 15 8 8

Total Provinces, including Djakarta and Jogjakarta, 1961 . . . . . 3 Q Z1a1 Provinces, including Djakarta and Jogjakarta and using 1961 figure for South Sumatra, 1968 ...... 97.765.1

.Total Cities, 1961 ...... t * * * . . . * . 9,826.88 Total Cities, 1968 ...... e. e c e e12,842.1l

Percent Increase Total Cities = 30%

Percent Increaase Total Provinces = 17.2%

Cities as per cent of Total, 10,l 11.7%

Cities as per cent of Total, 1968 = 13.1%

Source: TATA KOTA DAN DAERAH- Directorate of City and Regional Planning, Dept. of Public Works. Percent change 1961-1968 calculated by World Bank. Table 2: GROSS DOMESTIC PRODUCT OF DCI DJAKARTA BY TYPE OF INDUSTRY AS A SHARE OF THE NATIONAL ECONTOMY (IN PERCENTAGE$)1966-68

Indus= 1966 1968

1. Agriculture, forestry7 fisheries 1.85 1.64 1.40 a) Foodstuffs 2*32 1.80 1.45 b) Cattle raising & products 6.83 5.77 6029 c) Products of fisheries 0.37 0.29 0.39

2. Mining and Minerals - - 3. Manufacturing 8.94 10.60 8.53 4.. Construction 38.49 27.47 21.88 5. Electricity, Gas and P"iblic water supply 37.20 24.61 24.29 6. Transportation and Commmication 37.90 38.18 53.59 a) Railroad transportation 24.47 18.39 17.67 b) Air transportation 79.30 79.09 80.27 c) Commmication 30.95 8.89 17.55 d) Other transportation 38.13 40.64 56.35

7. Trade: Wholesale and Retail 25.37 25.03 22.73 8. Banks and other financial institution 82.39 68.43 74.58 a) Bank 78.14 65.82 66.25 b) Insurance 90.00 90.00 90.00 c) Other 1.72 3.05 3.06

9. Dwelling 22.39 23.86 23.90 10. Government and defense 12.02 12.77 14.17 11. Services 1.37 1.10 1.17 12. Gross Domestic Product in i.CI Djskarta 9.25 8.92 8.73 13. Population 4.5

Source: Office of Census and Statistics - DCI Djakarta -64-

Table 3: GROSS DOMESTIC PRODUCT, DJAKARTA, 166-1968

1968

Gross Domestic Product, i7 29, . . 1n. of rupiahs, cutrent prides 29p205.2 75t65t.4 1749903.1

Gross Domestic Product, in Jillions of rupialha, constant (1966) prices 29,205.2 30,395.0 32,026.5

Grosse Domestic Product, per capita, rupiaha, current prices 7t,08.8 17,433.7 38,861.5

Grobs Domestic Product, per capiti,7 rupiahe, constant (1966) prices 1V083vS 7i°°3.9 lill5.9

Souxtet Censut and Stdtidtics Office. DCI Djakar t

Approximate free market Rate of Exchange, 1966 1 = 60 rtuoihb

. Table 4t: PERCENTAGE DISTRIBUTION OF THE (ROSS DOMESTIC PRODUCT, DJAKAPRTA BY CATEGORY OF ECON1OMIC ACTrVITY, 1966-1968

Activity 1966 1967 1968

Agricultuxe, Forestry, Pishing 10.68 9.89 8.32

Minng and Quarrying - - -

MIMacturing Idustry 8.12 8.68 8.71

Construction 4.61 5.12 5.25

Public Utilities 0*13 1.14 1.25

Transport and Communications 7.27 9.34 12.35

Wholesale tnd Retail Trade 52.20 49.26 46.64

RAnking and Finance 4.51 3.62 4.14.

Housing 4.75 5.24 5.37 oovernment 6.67 6.85 7.13

Other 1.06 0.86 0.84

fotal 100.00 100.00 100.0

Source: Census and Statistics Office, DIX: DJakarta 66

T-le: rISTRIBUTION AND PERCENTAGES (IN PARENTHESES) OF ECONOMIC HOUSEHOIDS SPECIFIED ACCORDING TO STATUS OF RESIDENCE AND NATURE OF CONSTRUCTION, 1969

Hous Status 3,iilding Bent Rent and Construction Onm Ek.emt Contract BouRht Rent Total

Permanent 859271 56,447 7,206 1,201 38,432 188,557 (9.16) (6.06) (0.77) (0.13) (4.12) (20.24)

Semi- permanent 1059688 37,231 l16814 - 49,241 208,974 !(11.34 ) (3.99) (1.80 ) (O oo) (5.29 ) (22.42 ) Temporary 225,788 93,678 44,437 - 170,542 534,445 (24.22) (10.05) (4.7) - (18.30) (57.34 )

Total 416,747 187,356 689457 1,201 258,215 931,976 (44.72) (20.10) (7.34) (0.13) (27.71) (100.00)

Source: Census and Statistics Office, DCI Djakarta. - 67

Table 6: DISTRIBUTIONJ AND PERCSEN,iTAGES (IN PAREI-J'E:SES) OF HOUSEHOLDS SPECIFIED ACCORDING TO IFACILITIES ON LE:CTRICITY AD) WATEiR SUPPLY BY INCOMNE * GROUPS, DJAKAKILTAl, 1969

*Electricity Water Non e1ectricity Income and Electricity Supply and Wlater 2uppl Only only Non water. sp p, Tot.al

2,000 and less 1,201 12,810 13,211 (0.13) (1.29) (1.42)

2,001-2,500 - 1,201 - 20 h17 21,618 (0.13) (2.19) (2.32)

2,501-3,500 6,005 1, 201 61,251 68, 457 (o0,64) (0.13) (6.57) (7.34)

3,501-5,000 4,804 13,211 6,005 15Sh,929 178, 9h9 (0.52) (1.42) (0.61) (16.62) (19,20) 5,001-7,500 15,613 8,1)407 3,603 225,788 253, 31 (1.68) (0.90)' (0.39) (24.23) (27.20)

7,501-10,000 77,206 15, 613 6, 10,83h 129,703 (0.77) (1.67) (0.64) (10.82) (13.90) 1001-15,000 18,015 24,020 4,804 81,668 128,507 (1-93) (2 58) (0.52) (0.76) (13.79) 15,001-20,000 3,603 13;211 2,1402 '22.,819 h2 ,035 (0.39) (1.142) (0.26) (2.145) (4.52) 20,000-25,000 10809 13,211 1,201 14,412 39,633 (1.16) (1.42) (o.i3) (1.55) (4.26)

25,001 and more 8,407 33,628 2,,402 12,01.0 56, 147 (0.90) (3.60) (0.26) (1.29) (6.05)

Total. 714,1162 124, 904l 26,422 706,188 931,976 (7.99) (13.40) (2.84) (75.77) (1oo.O)

Source: Ccnsuis and Statistical Office, DCI Djakarta

$1 326 rupiahs Approximate rate of exchange, 1969, t Table 8: INDONESI: M)TOR VEHICLE REGISTRATION, 1962 and 1969, GEOCG1APHIC DISTRIBIUTION - UNITS

rk eueee Triwke & Buses lh!otoroyelea - Are h-lheel ?Dtal 192 62 2 1Q66 1962 1°69 196Z 1969 1962 i

a---! Adtzra 96,263 165.1401 1 J5 55f674 7,0 6 2, 41 j47,409 6,i6j 1A43,132 26,.481 1243,672 230,566286.8014 100,041: 143,187 77,870 12,6149 18,450 2,921. 4,595 15,570 23,045 41,880 97,639 58,757 100,915 103,637 195.554 * 16,239 31,543 8,608 9,g90 CentrAl 1,352 1,736 9,960 11,666 25,593 48.724i 26,199 43,209 51,792 91,933 114,308 20,2e5 7,951 11,210 1,321 1,397 9,272 12,607 314,90T. 59,208 23,580 32,8B2 58,1483 92,100 t -act * 22,529 35,703 11,145 16,084 1,462 1,763 12,607 17,8147 37,751 63,910 35,136 53,550 72Z537 117,1460 ' S=atra 2',.475 3],253 .20.6827,P53 9,041, ?9C6219.4 42,216 , 53jPS3,117 67,8014 72,576 110,020 %:S !.orth B 13,220 14,837 8,808 12,179 5,212 14,176 14,020 16,355 12,443 26,246 27,2140 31,192 39,633 57,138 1,898 4,705 1,818 5,0114 598 1,175 2,4'6 6,189 2,428 7,021 4.314 10,8914 657142 South* . 17,915 8,357 11,716 9,912 10,660 3,284 3,342 13,226 114,002 * 1,568 8,949 21,583 25,718 26,151 34,667 Ml i=71tan 351f 14,M02 3,23 82 32 6 q3.<61 3.706 2.762 5;_ Z. 8,0 9,8569 13J t Other L-em g 5,065 11,163 5,2 8,751 ?.170 z L' 10,740 8,084 112,817 21,903 20,201 . Total Itrdonesia 12&,L3 p,660,69,738 L8 2 116,157 173; 416 7 0 ,21 66k.8Q

ote-: InCIudeS al registered vo!doles inoluding non-operatiowdl onDs (see Table 6). Doe* not include military or diplo=atio eshioles (coe T.be 7). TnluYow jeep-type vehicles. 7Ir- incuds motorcyclea, motor ocooters and motorized bicycles. rcl.udes JoSakarta. 4 Ic1udefsaAt 4. /a TIzlu4es Vect Sumatra and Fien. ,h. 1Icludec Soath S=atra and Dja:nbi. nIclues SulawEai, Bali, Lescer Sunda Island (Nusa Teng-&a), the Molueca andVYo.t Trin .

S0creet Contral Stetirtlcal Bureau, Semua Kenera-an Beqctor, 1970. - 70 -

TaW.c 9: Number of motor Yelh±olea ptasing cirttain rotdW on lhctl sme dnyE and certain time in DOI Dj3a1irt^r. iz 1969 (,a±n ltute from 6.00 a.m. - 21.00 pm connecti r rom 6.00 a.m. 0

-~rd~ -> - - Tuead.rq Wednelldc-q No. Roads for IAvAn Routes I5ond; te'3 y Xrida STu n Total 1 ' Gad ahiadaAota 36.5 35.6 34.7 35.6 24.3 166.7 Kcota 2 Haim Wuk 39.3 38.9 36.9 35.9 28.4 179.4 laxmonfli 3 *lJordcha Barat 23.5 23.1 22?2 23..9 14.3 107.0 Kota Kebajoran 20.3 ' 19.9 19.1 19.6 12.5 91.4 4 Thamrin Kota >1.9 31.4 31.0 29.3 21.4 145.0 Kobajoran 3Q.2 35.2 33.3 34.3. 19.5 156,5 5 PAnd. 8udirnan Kota 37.2 38.4 35.0 38.1 26.3 175.8 Kebajoran 42.1 41.9 30.9 39.4 26.3 107.6 6 Otto Iskendardinata ' anteng 7.9 8.3 0.5 8,4 7.5 40.6 Tjawan 9.9 10.1 9.6 10.0 8.9 48,5 7 .. Banteng 24.7 21.6 20.3 25.1 16.7 108.4 Tjawang 20.6 20.9 20.9 21.2 16.5 100.3. 8 Kramat Ra Bangena 27.7 26.S 26.3 26.9 19.8 12'7.6 Tjavfan 26.3 23.4 23.3 24e5 19.5 117.0 9 Gwnlutn~ a~a Sonen 35.6 15.7 3.4.9 14.8 11.9 73.0 Pntjol 13~ 10.4 11.4 -1O2.9 .2

*Tuesday Roads for connecting Wedor4kzy No. routes 1londa £u , Fride Batii.rd-da Total 1 Aponedoro (G.Wlanita) Salemba 11.6 - - 11.6 Rebajoran - 12,7 - - - 12,6 2 Diponegoro (pipip) Snlembd - 12.2 -2 - - 12.2 Kebajoran - .5 - 9.5 3 glentenG_R Branteng 307 - - 30.7 Tjakini 30.6 - - - 30.6 4' Merdeka Tixur Air Liantjur -9.3 - 9.3 KWitang - 14.6 - - 14.6 5 Swy-gh Begar Hajara VuiruI . 8.5 - - 8.5 Pintu Besi 14.3 - - - 14.3 6 Pintu -Heal. Sawv oar - 6.7 - -6 Gunvunai Saharvi 11.6 - - 11.6

7 Jr. Djuanda 40.9 - - 40.9 8 Ve teranl 15.9 35.9 9 ZPa,Caka By-pass - 6.9 - - - M4atra,an - 6.9 - - - 6.9 10 ' -Pas 7*6 - - 7.6 Senen - 8.6 - - 6.6 Source: Traffic 8rvcy. See also FigSe 3, Table 10: CENThA1L VERSUS MER LEVEL 0OVERNI NT REVENUES

collected Reven:ues col- by local end lected by As a% R1evenues Qol- As a % As a % rcgornl. the centr.al 2 =:LLmz ed of total. or leeted of tot-al ccntra.. of total a0-rtva gorv't at a bY a^d local nd locl al d re- locao end govc=nt local and ot.: cta l ,o tot-- -'-- iC. t':' regiona1 Cionn--gov-' regional 1 C;%v- cc rcr,Cone! Central go.;?t re-cote ;ov' z-en.uert oe- -ov t by the cn,al. gov to go-,:t re- ij o L =^ '-! roVenuBn Lovernunt eCs nre3vU "r,e=r re*)ve244s (v2s (a- - g.; %:Ilio.ns) 5;l E () 19352 200.0 9.6 n.a. n.a. 1,837.0 90.4 12,246.8 1.6 93.4 1953 340.0 15.6 n.ao n.a. 1,636.0 84.4 13,590.5 2.4 97.6 . 55 1954. 3T7.7 3 13.8 n.a. n... 2 ,55.0 6.6.2 11,72.87 3.2 9649 1955 429.0 '9.5 n.a. n.a. 1,775.0 30.5 14,226.5 2.9 97.1 1967 ,2536.3 16.8 8,410.6 43.8 7,562.3 39.4 84,877.7 3.4 96.6 1968 . ,4-2.O 9.8 13,325.7 38.3 18,058.3 51.9 135,2v3.4 1.7 93.3 1969/70 5,000.0 7.9 25,090.4 39.5 33,412.0 52.6 334,762.0 1.4 (fisal 93.6 year)

Note: If rev collected for local and regio.--" govez. ents by the Central Gover=ent (column 4) we=e greater tene zero, the fjgures fiOr 1952, 1953, 1954 and 1955 wrould be evea larSor. t t VSrce: M.D. Dris, ` ation 0 in Inronezia", de-ndiaonea. et^'nan Thdonest,ia XI- ( ust-September, 1958), p.4 8; end Depart-ent of Fin=ce, '.I.

S ao Table 11: ADO EXPORT RECEIPTS BY REGIOIIAL 8JVFJUL.NT3 (In thoux;and of US dollar)

Re jpnal Covorrmeniits C 11!t.. ij_tr. 33t C)t;I Total

1. D. I. .Atjoh 216 2 257.6 179.2 307.8 940.8 2. North Situatra 2,6)7.3 3,134.0 2,443.2 3,113.7 119328.2 3. Wo6t Sur:atra 350.5 237.6 328.6 522.8 1t439.5 4. Djambi 491.3 604.2 479.6 550.3 2,125.4 5. Riau 655.5 613.9 697B. 703.1 2,674.7 6. South Simatra 1 976. .3tll5.6 2944o0.9 2,£51.2 10,383.7 7. Begkulu 3.5 74.3 3.1 101.5 182.4 8.iLampung 744.9 1,228.5 1,021.9 752,6 3,747.9 9. West Java 37.6 59.4 35.6 14.1 146.7 10. D. C. I. Daya 794.2. 855.3 723.4 600.3 5,053.2 11. Central Java 277.9 456,6 235.2 332,0 1,302.5 12. East Java 531.83 683.1 452.7 676.7 2,344.3 13. Bali 44.2 39.5 .44.6 60.8 209.1 14. kloet lHua Ten-gara 14.3 12.4 15.3 12.5 54.5 15. East INuna TonSara 41.4 32..6 35.0 43.7 152e7 16. WGnt Kalinanta 625.6 852.7 69701 848.7 3,024.1 17. Centra! Kalntr2aztm 117.0 21.2e5 209.5 194.7 734.5 18. South JCa1iiaantan 392.6 436.6 340-.. 2632 1,t440.5 19. East Ka1liuatr;ta . - 769.2 769,2 20. North Sulawosi 300.9 152.2 267.5 272.0 993.4 21. Central Sul.asoi 93.0 54.9 44.1 3192.01 22. South East SulaUosi 36,2 31.9 83.6 1231,9 283.6 23. South Sualao8o 85,.2 76.5 132.9. 101.7 396.) 24. North N4aJl.u 12.3 14.7 9.4 71.2 43.6 25. Na1uku1 52.5 58,2 45.2 66.7 222.6

Total L 3 2 430.(, 8,205.6

L April 1969 through I*!arch 1970. Noto: Totals may not add up dus to rounding.

Source: Ministry of ]inanc: .7 3-

Tb3le 12: COOJTRBUTh1011 BY O£RAL GOVEMMNT TO PROVINCES- TOTALS AND PER CAPIVi', 1968 and 1969170

1968 Par l969/70 Per Population Contribution Capita Contritution Caoita Ao,ice oW*}(D]RpZ

Pat Kaliaentan 0.7 18.6 286 777.0 1,179 Central Kalimantan 0.6 175.5 296 605.1 1,018 C*ntral Sulawesi 08 201.6 245 83i11.8 993 ltD&;u 0.5 3 378.73 779 Southeast 8ulawreti 0.7 161.5 241 515.1 737 Djmbi 0.9 195.1 219 589.5 663 Atjeh 1.9 307.9 158 1,287.1 660i Iluku 0.9 285.6 303 562.0 595 l:iau 1.5 325.6* 220 719.9 478, North Sulawesi 1.6 458.7 293 749.3 473 South Waimntan 1.8 29.6 164 792.3 449 West Kalimantan 1.9 242.4 128 827.4 437 Bast Nusanteggira 2.3 564.0 236 919.8 392 West Suaatra 2.8 512.9 185 1,040.9 379 .DJkarta &ELa 4.7 850.4 178 1,739.7 367 North w-natca 5.9 1,313.8 221 2,067.1 JogJakarta 2.6 455.6 172 866. 0 32B 1.npurO 2.0 262.5 131 / 634.2 319 &Suth S3uatra 3.3 533-?w 141W 1,045.7 315 South Sulaweei 5.4 765.8 192 10598.0 296 Bali 2.1 262.3 123 579.7 272 Vret Nucatengga 2.2 233.1 16 560.5 259 West Java 19.5 2,939.0 1SO 4,365.9 224 O:entral Java 21.7 3,117.0 143 49390.0 202 lost Java 25.8 237 12

;/ Since criteria and admiinistratire regula.tione applying to Vost Irian d'ffer from those applying to other provinceo, data :or West Irian nre not included here. iz. 1968, Rp 4.6 billion was budgeted for Ytost Irian, and in 1969/70, 8.7 billion, for aome 907,000 inhabitants. £( Denakulu included in South Sumatra in 1968. , Icludosx Rp 160 million 'ra9erre' not distributod by p"oviLnew;I

Sourocs Departemen IDlau Negeri. Tab TOTAL INCO0;E, PROVINCES-/AND KABUI'ATEN 1968 and 1969/70 (In millions of ripiahs)

1968 1969/70

Central

Central government contributions 18,058 33,412 Share in petrol tax 227 227 Special contribution for development 200 -

Regional

Provincial taxes, retributions 1,904 2,739 Kabupaten taxes, retributions 1s529 2,261 Surcharge on petrol 664

Other

Ipeda 4,OQQ 7,000 ADO (export tax) .16,500 /2 17,200 /3

Total 42 418 63,502

/1 Not including West Irian /2 At a rate of exchange $1 = Rp 300 /3 At a rate of exchange $1 u Rp 350

Source: Department of Interior. Taken from Martin Sanders, "Regional Finiaice' Bulletin of Iiidonesian Economic Stuldies, Vol. VI, No. 2, July, 1970, p. 69.

.. Table 1h: 1XtJICIPAL REVENUES DIN :'X)NESIA, SELECTED CITIES BIDGETED R-VENJZ:S FORZ !969/70 (thou.sands of runiahs)

1969/70 PRealizod

Cities Ser Solo ckassar DeeaDartaa a

1. Subsidies from the Central and/or Provincial Goverment 84,367 19.1 88,062 30.6 118,732 35.5 2,044,000 35.1 1,9e88692 II. Tax Revc=es 1. MIto Yiiclec: T'- - - - 500,000 8.6 819,029 2. IWEDA/IPBDA 57,000 12,9 25,500 8.7 20,000 6.0 400,000 6.9 200,922 3. Tax oza changinEg ownex'sbip of motor vehicles - - - 703,00C 12.0 1,279,721 4. Enteft 'i-nient ta 28,000 6.3 10,000 3.4 55,800 16.8 2000,000 3.4 S3,7 263 5. -'Uammenttx 21,000 4.7 2,000 .0.7 12,000 3.6 100,000 1.7 1817752 ., PRadio tax 62,000 14.0 24,000 8.2 5,COO 0.1 36,S353 7. Ta,x on foreigners 70,000 15.8 5,000 1.7 7,500 0.1 - S. Ta on dogs 70 0.0 25 0.0 500 0.0 170 .. 3 9. Sl.au.ghter tax 250 0.1 8o0 0.3 75 0.0 10,000 0.2 1,014 10. T.- on motor-hicles 4,00 0.9 1,0083 0.3 . - 2,000 0.0 15,5,0 ' 1. Licixr 'Unt 200 0.0 15 0.0 250 0.13 o,0O 0.0 953 12. Ailvrert- se(ent toax . 1000 0.2 400 0.1 2,5032 0.0 6,057 13. Street tsqes 2,000 0.5 - - 29500 14 ADO - 300,000 5.1 347,489 15. Other t4xes ,50 1.j 22,10 8.000 2.4 100 0.0 2.640 ' T'ts t=es 251,070 56.7 71,478 24.4 96,123 28.8 2,228,600 33.2 3,250,019 I.. Cbharges and License Pees 57,511 13.0 28,594 9.5 4i,112 12.3 42,650 0.7 201,815 IV. Li£o! fro Ropaienof IO:aes - 42,576 14.5 . R1eYaznue from Governo=nte-owd nterpriseos - - 69,230 20.7 10,000 0:2 30,500 VI. Special v.:enues (Lotterx/Casino) - - 1,500,000 25.7 2,261,804 rI11. Other Revenues -A e4 11.2 6227 21.2 ,-000 0.0 _ -.U 352 TOTAL 442,533 100.0 292,936 100.00 334,199 100.0 5,826,250 100.0 8,512,689

Sar ce: Smith o. cit. p. 25 - 76

Table 15s Recapitlation of p1 pod end realsed rovenue budget of the CoGrrzant of D.O.I. DJa%artA in tlxo first, *- second third and cuartera of the 1062-- 1970 service 7eLr

p1e=sd Actuzla (p.) (Hp.) Planned R&alized Jo. Revemose k2iflions) Millions) (S) (5 )

__Mlus from last year 90.8 - 1.31 II; Revenuca from the Rovernment

1 rannafer from Central Govern- ment 1,260.0 1,317.0 29.30 18.94 .24 Subsidy - - - 3. Others - 32.6 - 0.47 ,' 60.050? 293019.41

III. Reaional Taxe a

M.Iotor Vehicle Tax 375.0 498.8 8.72 7.38 2. Developmont Tax I 75.0 92.7 1.74 1.34 3. Real Estato Tax 300.0 130.1 7.00 1.67 4. Entortainment Tax 150.0 293.6 3.48 4.21 5. Property Transfer. =ax -525.0 . 897.2 12.20 12.91 6. Other Taxes 21.5 14.2 , 0.50 0,21 1,j446.5_ 1,926.1 Y3-.6I4 27-.72 IINA Regonl Rtiuin

1. Tax on Oil ' 48. 79.3 1.12 1.15 2. Poreigner's Tax 8.3 10.9 0.19 0.15 3. Su:rchasge Gasolin 225.0 1607 5.23 2.30 4. Industrial Service 7.5 4.7 0.17 0.06 5. Publio Wtorks 7t.5 94.1 0.17 1.36 6. Husbandry 0.4 5.7 0.01 0.07 7. Funeral Service 0.8 2.8 0.02 0.03 8. City Health Servi*e 1.5 0.1 0.03 0.02 9. Population Affairs 6.0 11.2 0.13 0.03 10. Automatic foreign Exchange Allocation (AMO) 150.0 239.> 3.48 3.45 11. Other Retributions 0.1 6.9 0.00 0.09 454.961J15587

IV. Property Iease

1. House/Land Lease 0.09 0.3 0.00 0.01 2. Forestry Sorvico 0.3 1.5 0.01 0.03 3. Charges on Sea Pishery 5.3 3.6 0.12 0.06 4. Charges on Land Fishery - .0.1 - 0.0QI 5. Agricultural Service - 6. Housing Servioe 7. Other Property Lasae -a-_-_- 56 .6 00 0.11f V. Retionn= Hnterpse

Revenue of Government owned Entexprisea * 7.5 30.5 0.17 0.44 VI. Specific RewVnuen

1. Lottery 300.0 610.3 7.00 8.78 2. Caalno 825.0 1,115.0 19.19 16.04 3. Other Specifio Revenues ______1,125.0 11725.3 26.56 25.26 VII. Other Revenues

1. Other Types of Revenues (from centml 5ovt.) .,2 125,1 0.0,2 . 74 TOTAL 0? REYRNWS 4,300. 6,954.4 100.00 100.00

SQurcel Directorato VItlnLneo of D.C.I. *D,r.karta Duocript4ou: +) - provysional fi.-pros. - 77

Table 16: Recpitulation of the planned and roalized expenditure budget of the Goyernr.ent of D.C.I. Djakarta in the first, * iecond and th.ird qur.rters of the .969 20 serrice year

Planned Roalized (n1.) (Rp .) Planned Realized No. *xpenditures '(zillioe) (mijon)

I. Ceneral Implic.ntation 199.0 236.2 3.68 4.37 .I. Territorial Trnalemnentation

i. Central Dajslarta 153.9 181.5 2.85 3.36 *W2. ent Djaokrta 166.4 130.8 3.08 2.42 3 )Iorth Djakarta 139.1 92.7 2.57 1.72 4. East Djakarta 155.6 111.0 2.88 2.05 5. South Djakarta. 2.80 2.82 766.4 66. 6

III. Services

1. . Public Wiork Services 169.5 101.7 3.14 1.88 2, P and P Service 49.5 106.3 0.91 1.97 3. City Bcalth Service 70.3 71.1 1.30 1.32 4. Social Survice 13..8 14.9 0.25 0.27 5. Sanitation Service 88.8 78.9 1.64 1.46 6. B.P.X. Service 41.0 39.8 0.76 0.74 7. L.L.D. Sexvice 11.9 13.9 0.22 0.26 B. Funeral Service 22.5 . 21.6 0.42 0.44 9. Rusbandry Servrice 8.8 6.5 0.16 0.12 10. Atricultural Service 10.0 6.4 0.18 0.12 11. Forestry Service 6.4 3.5 0.12 0.06 12. land Fishery Siervice 4.7 3.5 0.09 0.06 13. Sea Fishery Ser-vice 5.9 5.0 0.11 0.09 14. Industrial Servrice 10.0 7.0 0.68 0.70 15. Tax and Revenve Sex,rice 36.8 37.8 . 0.68 0.70 16. HousinS Service 5.8 7.4 0.11 0.14 17. Finance Inspectorate 10.2 10.4 0.19 0.19 18. Agrnrian Iwspection 8.6. * 4.0 0.16 0.07 19. Cooperative Directorate 3.9. 1.4 0.07 0.03 * 20; Cultural Service 5.9 6.2 0.11 . 0.12 21; Mweuqlie1tory Service 21.26 _3__O54 60.5. 5§- 61203 .4s3o

n. Personnel Wolfar. 843.3 1,029.5 15.61 19.05

V. Othor Aotivitice 117.4 145.2 2.17 2069

VI. Other cx"2nditure1 4.26 TOTA.L ROUTINE: 2,876 1 18.12 26.00 YII. D-yve opment 0

1. Goveniment AdnTinistration 174.0 183.1 3.22 3.39 P2Pub'Iic Socurity 30.0 12.7 0.56 0.24 3 "ublic Welfare 716.3 621.0 13.26 11.49 4. Territorial Development 1,558.5 1,339.3 2a.84 24e78 5. Loonomy 19.8 - 0.37 6. Kmrpong Improvement -75 *5 2 .2 6 51 ?OTAT OF -,EVEI-fl;3MT .8 2x227_ _ _52.82 46.78

TOTAL OF EiPEINDJTURS 5,403.8 5 403.7 100.0 100.00

Souret Directorato VI/Financo D.C.I. Djnadrtn INDONESIA

lo. P LAN - DJAKARTA

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