National Urban Policy: Cities as Engine of Growth

Transcription

1 National Urban Policy: Cities as Engine of Growth Minister of National Development Planning/ Head of National Development Planning Agency The 4th Planocosmo International Conference Bandung, 4 April 2018

2 2 Sustainable Urbanization

3 3 Indonesia s Population Projection * million Total Population 321 million 2.28 Total Fertility Rate years 72.8 years Life Expectancy 65.76% 80% Labor Participation Thousand people Laki-laki Male Perempuan Female Bekerja Working Sedang Schooling Sekolah Lainnya Other Projection Working Age Population (15-64 years) Labor Force Participation Rate Employment million million 77% 80% million million 49.2% Dependency Ratio 52.3% 53,1% Urban Population 67,1% Source: *Indonesia Population Projection Revision (current estimation) In 2045, Indonesia will experience a substantial population growth- an increase of 63.9 million or percent. About 67.1 percent of population will live in urban areas. Numbers of working age population will continue to increase, but the share of younger groups (aged 15-29) will decline. It is likely as the result of the extension of average years of schooling. The labor force is projected to grow over the next 30 years at an annual rate of 0.7 percent. By 2045, the labor force is projected to reach million.

4 Advanced Urbanization in Java 1 SUMATERA 51,697,225 PEOPLE 39.1% URBAN / 60.9%RURAL 2 KALIMANTAN 14,105,730 PEOPLE 42.2% URBAN / 57.8% RURAL JAVA 138,311,286 PEOPLE 58.6% URBAN / 41.1%RURAL SULAWESI 17,663,879 PEOPLE 33.6% URBAN / 66.4%RURAL JAKARTA 3 SURABAYA BALI AND NUSATENGGARA 13,327,280 PEOPLE 39.2% URBAN / 60.8%RURAL MALUKU AND PAPUA 11,972,106 PEOPLE 29.4% URBAN / 70.6% RURAL Island Source: World Bank, Population (000) Proportion to national (%) Population density (/km 2 ) Sumatera % 23% Jawa Bali % 55% Nusa Tenggara % 4% Kalimantan % 7% Sulawesi % 8% Maluku Papua % 3% Tier 1 Metropolitan > 1,000,000 Tier 2 LargeCity 500,000 1,000,000 Tier 3 Medium City 100, ,000 Tier 4 Small City < 100,000 4

5 Spreading Growth through Urban Development Mebidangro ManadoMinahasa-Bitung Patungrayaagung Sorong Jayapura Banjarbakula Legend: = Rails Ambon Kedungsepur = Main roads Jabodetabekjur Mamminasata = National Activity Centers = Regional Activity Centers = Port cities Bandung Basin Sarbagita = Aerotropolis Gerbangkertosusilo = Dam = PLTN = Airports = KSN Mebidangro = Medan-Binjai-Deli Serdang-Karo = Palapa Ring Lane = PKN Patungrayaagung = Palembang-Betung-Indralaya-Kayuagung Jabodetabekjur = Jakarta-Bogor-Depok-Tangerang-Bekasi-Cianjur Sarbagita = Denpasar-Badung-Gianyar-Tabanan Kedungsepur = Kendal-Demak-Ungaran-Salatiga-SemarangPurwodadi Banjarbakula = Banjarmasin-Banjarbaru-Banjar-Barito Kuala-Tanah Laut Gerbangkertosusilo = Gresik-Bangkalan-Mojokerto-SurabayaSidoarjo-Lamongan Mamminasata = Makassar-Maros-Sungguminasa-Takalar 5

6 Log GDP Per Capita (2010 Constant USD) Urbanization Without Growth Indonesia s urbanization only 1% contribute to increased 4% GDP Indonesia y = x R² = The better leveraged is urbanization, the more it will benefit national economic growth Urban population share (%) Log of GDP per capita v urbanization, 2015 But if badly managed, there is a risk of urbanization without growth Source: World Bank, 2017 (based on WDI data 2016) 6

7 Chronic Shortages in Access to Basic Infrastructure 72% access to improved water supply access 11.4mio Household have no house 42% access to public water supply 11.6mio Households live in homes with physical buildings unfit for habitation 67,5% 1% 14 Improved sanitation access (including 7,4% safe access, appr. 2% of sewerage and appr. 5% of FSM*) serve by sewerage systems cities having substantial sewerage networks 10.8mio IDR 128T 9% 5-20% Households who must live to share the roof with other families yearly loss because of traffic congestion annual growth of rapid motorization public transport share 18 champion cities for FSM* *FSM = Fecal Sludge Management IDR 28T air pollution cost Source: Bappenas dan Yayasan Pelangi 7

8 8 Integrating NUA s Principles and SDGs

9 9 Integrating SDGs and NUA in Indonesia SDGs: Universal; Integration; No One Left Behind NUA: Equality Leave No One Behind: Sustainable and Inclusive; Environmental Sustainability

10 10 Vision for Urban Areas towards sustainable urbanization Liveable Competitive Green and Resilient Local urban identity Instruments: Integrated planningbudgeting-financing Information technology for efficient urban management Transparent, accountable and responsive governance Institutional arrangement

11 Defining a Metropolitan Area...functional urban areas: a city and its commuting zone Definition of a city Identification of a commuting zone High-density cell (>1.500 inhabitants per km²) Urban centre (duster of highdensity cells with population > inhabitants per km²) Commune > 50% of its population in an urban centre City Commuting area Commuting area after including enclaves and dropping exclaves City Commune Commune with > 15% of its employed population commuting to the city Larger urban zone Added enclave Removed exclave Source: eurostat, accessed

12 12 Integrated Planning-Budgeting-Financing

13 13 Sustainable Urban Development and Management National Urban System (SPN) a. City s Function b. Interrelation between cities Environment a. Open Public Spaces b. Waste management strategies c. Clean energy Governance a. Government b. Government control c. Effective public policies Urban and Urban Areas Development Social a. Sport facilities b. Education c. Place of worship d. Healthcare Infrastructure a. Drinking water b. Sanitation c. Housing d. Electricity e. Telecommunication f. Roads Economy a. Trading b. Opportunities for investment c. Funding resources

14 Elements for Integrated Development Planning Capital Investment Development Facilitation Urban Management Monitoring-Evaluation How will we improve statutory plans and their implementation for integrated planning? Urban financing? What tangible benefits and impacts will we see? Source: World Bank,

15 15 Issues in Urban Financing in Tackling Inadequate Urban Infrastructure Cities are not self reliant revenue is not enough to cover expenses Absence of financial investment plans Lack of financial viability weak creditworthiness Low recognition for private investment s to support the mission toward liveable cities high recognition for competitiveness

16 16 Urban Financing Transfer from Central Government Local Government Budget Bank and institutional loans Non-government investment (PPP, KPBU, PINA, BUMN, etc) Zakat Long term municipal bonds Capital investment planning Projects for sustainable cities

17 Local Governments with immediate needs for infrastructure investments, and have expressed their interest in issuing Regional Bonds (8/93) Kalimantan Province DKI Jakarta Semarang Balikpapan Surabaya Makassar Bandung Yogyakarta Prov. Source: World Bank,

18 Investment Needs Exceeds Financing Capacity Investment need gap Borrowing capacity Surabaya 2,954 Revenue (excl. Salary, earmarked and contingency fund) Batam 825 Bangka 449 Pontianak 361 Banjarmasin 651 Balikpapan 339 Makasar 860 Bogor 521 Semarang 1,262 Surakarta 279 Gresik 642 Sidoarjo 875 Denpasar 606 Lombok Barat 339 Investment needs, borrowing capacity, and total revenue for 14 qualified subnational governments, USD Millions Source: World Bank, 2015; Directorate General Fiscal Balance Ministry of Finance,

19 19 Financing Urban Infrastructure Different sources of financing to answer Local Government s different infrastructure investment needs Addressed by creative financing such as Regional Infrastructure Development Fund (RIDF), KPBU, PINA, etc

20 20 Why RIDF? RIDF Demand-based, increase access to financing, rigorous appraisal, thorough monitoring including safeguards standards to ensure low default & good quality infrastructures Before RIDF Top-down approach, limited LG access to financing, inadequate project preparation & appraisal, weak loan monitoring led to defaults & distressed projects Eligible sectors Water & sanitation Environmental infrastructure Low income housing and slum upgrading Productive and logistic infrastructure Social infrastructure Eligible subprojects (examples) WTP, pumping stat Sanitary landfill, waste processing facilities Public housing, integrated urban upgrading Road construction, flyovers School rehab

21 21 THANK YOU