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Case Study Metropolitan Governance Metropolitan Bandung, Indonesia CASE STUDY METROPOLITAN GOVERNANCE METROPOLITAN BANDUNG, INDONESIA Author Teti A. Argo Urban Planning Senior Expert [email protected] Bandung, Indonesia Coordination FMDV – Global Fund for Cities Development 35, Boulevard des Invalides 75007, Paris - France www.fmdv.net Commissioned by United Nations Human Settlements Programme (UN-Habitat) Local Government and Decentralization Unit Urban Legislation, Land and Governance Branch P.O. Box 30030, 00100 Nairobi, GPO Kenya [email protected] www.unhabitat.org In collaboration with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Sector Project “Sustainable Development of Metropolitan Regions” Dag-Hammarskjöld-Weg 1-5 65760 Eschborn, Germany Tel. +49 (0) 6196 79 – 0 [email protected] www.giz.de This report was made possible thanks to the support of the Norwegian Ministry of Foreign Affairs to UN-Habitat. As at October 2015 Disclaimer The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers of boundaries. Views expressed by authors in this publication do not necessarily reflect those of the United Nations Human Settlements Programme, or the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. Excerpts may be reproduced without authorisation, on condition that the source is indicated. 2 Case Study on Metropolitan Governance Metropolitan Bandung, Indonesia Ms. Teti A. Argo This metropolitan governance case study is part of a joint effort of GIZ and UN-Habitat to develop a framework for their future cooperation with metropolitan regions and related partners. Three selected case studies – Metropolitan Bandung (Indonesia), Guadalajara Metropolitan Area (Mexico), and eThekwini (Durban, South Africa) - are complementing the global study “Unpacking Metropolitan Governance for Sustainable Development” (GIZ/ UN-Habitat, 2015).They were prepared by local consultants in collaboration with local institutions under the coordination of the Global Fund for Cities Development (FMDV). The three cases, although unique, are representative of the diverse situation of metropolitan governance in the global South and exemplify some of the core concepts of metropolitan governance developed in the international study. The Metropolitan Bandung case study has been realized by Ms Teti A. Argo and coordinated by FMDV. A comparative analysis as well as summary of each case study can be found in a separate publication. 3 Content 1. OVERVIEW OF THE BANDUNG METROPOLITAN AREA ................................................................................ 6 1.1 BASIC DATA ........................................................................................................................................ 6 1.2 POPULATION....................................................................................................................................... 9 1.3 ECONOMY ........................................................................................................................................ 12 1.4 SOCIO-ECONOMIC PERSPECTIVES: INFORMALITY, POVERTY AND THE YOUTH .................................................. 13 2. INSTITUTIONAL MATTERS ........................................................................................................................ 20 2.1 LAWS SETTING INDONESIAN DECENTRALIZATION PROCESS ......................................................................... 20 2.2 DISTRIBUTION OF POWER AND FUNCTION IN URBAN AREAS ....................................................................... 24 2.3 THE NEED FOR COOPERATION AND PLANNING: A GATEWAY FOR METROPOLITAN BANDUNG’S GOVERNANCE PROCESS IMPLEMENTATION? .............................................................................................................. 26 2.4 INTER-GOVERNMENTAL RELATIONS ...................................................................................................... 29 2.5 HIERARCHICAL NATURE OF THE ADMINISTRATIVE SYSTEM .......................................................................... 30 2.6 CITIZEN PARTICIPATION AND ASSESSMENT OF PUBLIC SERVICES ................................................................... 30 3. SPATIAL STRUCTURE ................................................................................................................................ 33 4. FINANCIAL MATTERS ............................................................................................................................... 35 4.1 TRANSFER OF PUBLIC FUND AND LOCAL CAPACITY ................................................................................... 35 4.2 FINANCE - EXPENDITURE RESPONSIBILITIES, REVENUES AND FUNDING OF INVESTMENTS ................................. 38 5. EXCERPTS FROM INTERVIEWS .................................................................................................................. 40 CONCLUSION ............................................................................................................................................... 50 ANNEXES ...................................................................................................................................................... 54 SOURCES ...................................................................................................................................................... 57 4 List of tables TABLE 1 LAND SIZE OF METROPOLITAN BANDUNG AREA (IN SQ. KM) TABLE 2 ANNUAL POPULATION GROWTH RATE OF METROPOLITAN BANDUNG 2004-2013 TABLE 3 POPULATION DENSITY OF METROPOLITAN BANDUNG (PERSON/KM2) 2004-2013 TABLE 4 COMPARISON OF POPULATION AND DENSITY OF METROPOLITAN AREAS IN INDONESIA 2010 TABLE 5 GRDP OF MUNICIPALITIES/REGENCIES IN METROPOLITAN BANDUNG AND ITS CONTRIBUTIONS (IN CONSTANT PRICE 2000 AND IN USD) TABLE 6 GRDP ANNUAL GROWTH RATE IN METROPOLITAN BANDUNG 2008 - 2012 (%) BASED ON CONSTANT PRICE 2000 TABLE 7 LEVEL OF OPEN UNEMPLOYMENT IN METROPOLITAN BANDUNG, 2008-2013 (%) TABLE 8 PERCENTAGE OF PEOPLE LIVING UNDER THE POVERTY LINE (%) 2008-2012 TABLE 9 CONTRIBUTION OF ECONOMIC SECTOR (%) IN GRDP IN METROPOLITAN BANDUNG 2012 TABLE 10 NUMBER OF HIGHER EDUCATION INSTITUTIONS IN METROPOLITAN BANDUNG, 2012 TABLE 11 A COMPARISON OF CONCEPTS AND MANAGEMENT OF URBANIZED AREAS, BASED ON LAWS ON LOCAL GOVERNANCE IN INDONESIA TABLE 12 COMPARISON OF HUMAN DEVELOPMENT INDEX AND URBAN PUBLIC SERVICE LEVEL IN MUNICIPALITIES/REGENCIES OF METROPOLITAN BANDUNG 2012 TABLE 13 COMPARISON OF SUBJECTS FOR TAXES AND LEVIES BY THE LOCAL GOVERNMENTS BETWEEN THE (DEFUNCT) LAW NO 35/2004 AND LAW 28/2009 TABLE 14 PERCENTAGE OF TRANSFER PAYMENT FROM NATIONAL/PROVINCIAL GOVERNMENTS TO MUNICIPALITIES/REGENCIES TOWARD BUDGET VOLUME IN METROPOLITAN BANDUNG, 2007-2012 TABLE 15 CHARACTERISTICS OF EXPENDITURE AND REVENUES IN METROPOLITAN BANDUNG, 2007 -2012 List of figures FIGURE 1 ORIENTATION MAP OF BANDUNG METROPOLITAN AREA IN INDONESIA FIGURE 2 ORIENTATION MAP OF METROPOLITAN BANDUNG AREA WITHIN THE PROVINCE OF WEST JAVA FIGURE 3 THE HIERARCHICAL STRUCTURE OF THE ADMINISTRATIVE SYSTEM IN INDONESIA AND POSITION OF METROPOLITAN BANDUNG FIGURE 4 A MECHANISM OF PARTICIPATORY DEVELOPMENT PLANNING IN INDONESIA FIGURE 5 PATTERNS OF SPATIAL STRUCTURE OF METROPOLITAN AREAS FIGURE 6 A MAP OF BUILT UP AREAS OF METROPOLITAN BANDUNG List of abbreviations AEC ASEAN Economic Community Bappenas National Development Planning Board BCF Bandung Creative City Forum DAU General Allocation Funding GRDP Gross Regional Domestic Product HDI Human Development Index KSN National Strategic Area KSPPN National Urban Development LRT Light Rapid Transit MB Metropolitan Bandung MDM Metropolitan Development Management MPW Ministry of Public Work PP Government Regulation RKPD Annual Development Working Plan RTR Spatial Plans 5 1. OVERVIEW OF THE BANDUNG METROPOLITAN AREA 1.1 BASIC DATA Metropolitan Bandung is the third largest metropolitan area1 in the country, after Jakarta and Surabaya. It is located in the west side of Indonesia, in the most densely-populated island of Java (see Figure 1). FIGURE 1 - ORIENTATION MAP OF BANDUNG METROPOLITAN AREA IN INDONESIA N Not to scale Bandung Metropolitan Area Source: The Indonesia Matters, 2011. Metropolitan Bandung (MB) was legally recognized (10 March 2008) as one of the national urban centers within the National Urban System, through Government Regulation No 26/2008. This regulation established MB as a National Strategic Area (KSN) revealing its national strategic position for the national economy as well as for the national urban development dynamic, beyond Bandung proper city. This recognition allows the central government to pour money into local governments that would strengthen the roles of MB for regional development. Metropolitan Bandung aggregates two municipalities (Bandung and Cimahi) and three regencies (Bandung, West Bandung and Sumedang) (see figure 2). Regency of West Bandung was legally established in 2007, separating from the Regency of Bandung. 1 Based on the Government Regulation No. 26/2008 on National Spatial Plans, the definition of formally-defined cities in Indonesia is based on population number, as follows: 1) small cities are those which has less than a hundred thousand (< 100,000) population; 2) medium cities are populated between a hundred thousand and five hundred thousand
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