Jakarta's Great Land Transformation

Article Urban Studies 1–22 Ó Urban Studies Journal Limited 2018 Jakarta’s great land transformation: Reprints and permissions: sagepub.co.uk/journalsPermissions.nav Hybrid neoliberalisation and DOI: 10.1177/0042098018756556 informality journals.sagepub.com/home/usj Suryono Herlambang Universitas Tarumanagara, Fakultas Teknik, Indonesia Helga Leitner University of California Los Angeles, USA Liong Tjung Universitas Tarumanagara, Fakultas Teknik, Indonesia Eric Sheppard University of California Los Angeles, USA Dimitar Anguelov University of California Los Angeles, USA Abstract We analyse dramatic land transformations in the greater Jakarta metropolitan area since 1988: large-scale private-sector development projects in central city and peri-urban locations. These transformations are shaped both by Jakarta’s shifting conjunctural positionality within global political economic processes and by Indonesia’s hybrid political economy. While influenced by neoliberalisation, Indonesia’s political economy is a hybrid formation, in which neoliberalisation coevolves with long-standing, resilient oligarchic power structures and contestations by the urban majority. Three persistent features shape these transformations: the predominance of large Indonesian conglomerates’ development arms and stand-alone developers; the shaping role of elite informal networks connecting the development industry with state actors; and steadily increasing foreign involvement and investment in the development industry, accelerating recently. We identify three eras characterised by distinct types of urban transformation. Under autocratic neoliberalising urbanism (1988–1997) peri-urban shopping centre development predominated, with large Indonesian developers taking advantage of close links with the Suharto family. The increased Corresponding author: Eric Sheppard, Department of Geography, University of California Los Angeles, Bunche Hall, Los Angeles, CA 90095, USA. Email: [email protected] 2 Urban Studies 00(0) indebtedness of these firms became debilitating after the 1997 Asian Financial Crisis. Thus post- Suharto democratic neoliberalising urbanism (1998–2005) was a period of minimal investment, except for shopping centres in DKI Jakarta facilitating a consumption-led strategy of recovery from 1997, and the active restructuring of elite informality. Rescaled neoliberalising urbanism (2006–present) saw the recovery of major developers, renewed access to finance, including foreign capital, and the construction of ever-more spectacular integrated superblock developments in DKI Jakarta and peri-urban new towns. Keywords elite informality, hybrid political economies, neoliberalising urbanism, real estate mega-projects, urban transformation ᪈㾱 ᡁԜ࠶᷀Ҷ㠚 1988 ᒤԕᶕ䳵࣐䗮བྷ䜭ᐲ४ਁ⭏Ⲵࢗ⛸൏ൠਈ䗱˖ѝᗳ෾ᐲ઼෾䛺ൠ४Ⲵ བྷර⿱㩕䜘䰘ᔰਁ亩ⴞǄ䘉Ӌ䖜ਈਇࡠҶ䳵࣐䗮൘ޘ⨳᭯⋫㓿⍾䘋〻ѝнᯝਈॆⲴӔ≷ ս㖞઼ঠᓖቬ㾯ӊ␧ਸර᭯⋫㓿⍾Ⲵᖡ૽Ǆ㲭❦ਇᯠ㠚⭡ॆⲴᖡ૽ˈնঠᓖቬ㾯ӊⲴ᭯ ⋫㓿⍾ᱟањ␧ਸරⲴᖒᘱˈᯠ㠚⭡ॆоབྷཊᮠ෾ᐲ䮯ᵏᆈ൘Ⲵǃᇼᴹ丗ᙗⲴሑཤ࣋䟿㔃ᶴ઼ㄎҹޡ਼ਁኅǄйབྷᤱ㔝ᙗ⢩ᖱກ䙐Ҷ䘉Ӌ䖜ਈ˖ঠᓖቬ㾯ӊབྷරԱъ䳶ഒⲴᔰ ਁ䜘䰘઼⤜・ᔰਁ୶Ⲵ᭟䝽ᙗՈ࣯˗ሶᔰਁъоഭᇦ㹼Ѫ㘵㚄㌫䎧ᶕⲴ㋮㤡䶎↓ᔿ㖁㔌 Ⲵກ䙐֌⭘˗ཆ䍴ሩᔰਁъⲴ৲о઼ᣅ䍴っ↕໎࣐ˈቔަ䘁ᵏ࣐䙏໎䮯ǄᡁԜ⺞ᇊҶй њԕн਼㊫ර෾ᐲ䖜රѪ⢩ᖱⲴᰦԓǄуࡦᔿᯠ㠚⭡ॆ෾ᐲ㿴ࡂᵏ˄1988-1997˅ˈ෾䛺䍝⢙ѝᗳᔰਁঐѫሬˈ↔ᰦঠᓖቬ㾯ӊབྷරᔰਁ୶࡙⭘Ҷо㣿૸ᢈᇦ᯿Ⲵᇶ࠷㚄㌫Ǆ ਨഐ٪࣑໎࣐㘼ਈᗇ㜶ᕡǄഐ↔ˈਾ㣿૸ᢈ≁ѫᯠ㠚ޜᒤӊ⍢䠁㶽ডᵪѻਾˈ䘉Ӌ 1997 ⭡ॆ෾ᐲ㿴ࡂᵏ˄1998-2005˅ᱟањᴰሿᣅ䍴ᰦᵏˈਟ䍴аᨀⲴਚᴹ䳵࣐䗮Ⲵ䍝⢙ѝᗳ 䘋ҶӾ 1997 ᒤᔰ࿻Ⲵ⎸䍩ѫሬර༽㣿ㆆ⮕ˈԕ৺㋮㤡䶎↓ᔿᙗⲴ〟ᶱ䟽㓴Ǆ䟽ᯠ䈳ᮤ׳ Ⲵᯠ㠚⭡ॆ෾ᐲ㿴ࡂᵏ˄2006 ᒤ㠣Ӻ˅㿱䇱Ҷѫ㾱ᔰਁ୶Ⲵ༽㣿ˈवᤜཆ䍴൘޵Ⲵ㶽䍴 ⑐䚃䟽ᯠᔪ・ˈԕ৺൘䳵࣐䗮઼෾䛺ᯠ෾䭷ᔪ䇮ᴤ࣐༞㿲Ⲵ䎵བྷර㔬ਸᔰਁ亩ⴞǄ ޣ䭞䇽㋮㤡䶎↓ᔿᙗǃ␧ਸ᭯⋫㓿⍾ǃᯠ㠚⭡ॆ෾ᐲॆǃᡯൠӗབྷර亩ⴞǃ෾ᐲ䖜ර Received August 2017; accepted December 2017 Across South-east Asia, the landscapes of Today, its booming real estate market (the major metropolitan areas have experienced world’s hottest in 2013) is dominated by a remarkable transformation during the last mega-developments driven by large and 30 years, as large-scale residential develop- well-connected Indonesian developers: a ments, catering to a newly emergent, aspira- great land transformation. Each is marketed tional middle class, shoulder aside informal as more spectacular than the last, feeding a settlements housing the urban majority. In seemingly insatiable demand. These range the mid-1980s Jakarta’s landscape was dom- from land-extensive peri-urban new towns, inated by kampungs, with just a handful of to single block multi-use towers, industrial high-rise hotels, office towers and shopping estates with residential districts, and multi- centres scattered along major thoroughfares. facility mega-projects offering residents Sheppard et al. 3 everything from cradle to grave – supplemen- greater Jakarta’s urban landscape since ted by planned offshore residential islands. 1988, by which time neoliberalisation was Such spatial transformations have to be circulating in Indonesia. First, we summarise understood within the context of changes in current thinking on the spatially variegated the dominant political economic regime, nature of processes of neoliberalisation and including complex formal and informal rela- informality, leading into a discussion of their tions between private capital and the state, evolution in Indonesia and Jakarta. We making it necessary to attend to the conjunc- emphasise two aspects: how neoliberalising ture of local and global processes. Locally, urbanism reflects the shifting positionality of Jakarta’s urban landscape is still redolent of a city within globalising capitalism, and the the colonial and post-colonial processes that enduring significance of place-specific infor- generated a city where the majority of resi- mal power structures. dents live in kampungs located between the The second main section provides an major thoroughfares: the desakota landscape empirical overview of these transformations, conceptualised by McGee (Armstrong and seeking also to explain them. We divide this McGee, 1985; McGee, 1991), inhabited by chronologically into three eras: 1988–1997 an urban majority whose complex livelihood (the New Order decade of autocratic neoli- practices have been documented by Simone beralising urbanism, culminating in the Asian (2010, 2014). Nationally, Indonesia’s politi- financial crisis and the fall of Suharto); 1997– cal economy remains dominated by a large, 2006 (democratic neoliberalising urbanism: unwieldy and opaque state apparatus, seek- the first phase of national reformasi, charac- ing to control land development but shot terised by limited post-crisis real estate through with formal and informal connec- investment); and 2007–present (rescaled neo- tions to the development industry (Hudalah liberalising urbanism: characterised by a and Woltjer, 2007). The national state also renewed desire of large developers to reinvest has a particular, longstanding interest in pre- in real estate, and the devolution of political senting Jakarta, the national capital, as a authority over spatial planning to regencies national model. Globally, since the end of and municipalities). For each period, we ana- colonialism Indonesia has sought to shape, lyse the spatio-temporal evolution of large- but also has been shaped by, global develop- scale private property development projects, ment imaginaries. Under Sukarno, and examine how shifts in political economic Indonesia was at the centre of attempts to regime – including both formal and informal craft a post-colonial ‘third world’ develop- relations between private capital and the state ment imaginary – an alternative to North – but also Indonesia and Jakarta’s integra- Atlantic capitalism and Euro-Asian com- tion into the global economy are implicated munism – initiated at the 1955 Bandung in Jakarta’s great land transformation. The Conference. In contrast, Suharto’s auto- role of international influence over these cratic regime was characterised by a geopoli- transformations, attenuated in a nation-state tical turn to the USA and the Washington that makes foreign ownership of property Consensus, a tendency that has continued in very difficult, is reserved for a separate the post-Suharto era. Today, Jakarta is a section. hybrid shaped by neoliberal global urbanism Our analysis is part of an ongoing and place-specific formal and informal research project examining these land trans- power structures. formations. The bulk of the data comes In this paper, we analyse the trajectory from a historical database of all major devel- taken by these land transformations across opment projects (new towns, superblocks 4 Urban Studies 00(0) and shopping malls) created by Herlambang of its basic operational logic. Concomitantly, and Liong, documenting the location, size we emphasize the profound path dependency (parcel, gross floor area and floor area of neoliberalization processes: insofar as they ratio), form and function of these projects, necessarily collide with regulatory landscapes the years they opened, and their ownership inherited from earlier rounds of political con- (including foreign involvement) and major testation (including Fordism, national devel- opmentalism, and state socialism), their forms commercial tenants. This was assembled of articulation and institutionalization are het- from documents acquired and relevant web- erogeneous. Thus, rather than expecting some sites for each project, as well as interviews pure, prototypical form of neoliberalization . conducted by the authors with developers of we view variegation . as one of its essential selected projects. The authors made site vis- features. (Peck et al., 2012: 269, emphasis in its to many of these development projects original) and undertook 20 interviews with the developers and consultants involved in selected Building on Polanyi’s insight that market projects. mechanisms can only function through their embeddedness

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