Jakarta's great land transformation: Hybrid neoliberalisation and informality

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 journals.sagepub.com/home/usj informality 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 politi- cal economic processes and by Indonesia’s hybrid political economy. While influenced by neoliber- alisation, 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: esheppard@geog.ucla.edu 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 for- eign 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൘‫⨳ޘ‬᭯⋫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ᶴ઼ㄎҹ‫ਁ਼ޡ‬ኅDŽйབྷᤱ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 1997 ᒤӊ⍢䠁㶽ডᵪѻਾˈ䘉Ӌ‫ޜ‬ਨഐ٪࣑໎࣐㘼ਈᗇ㜶ᕡDŽഐ↔ˈਾ㣿૸ᢈ≁ѫᯠ㠚 ⭡ॆ෾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- testation (including Fordism, national devel- (including foreign involvement) and major 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 devel- opers and consultants involved in selected Building on Polanyi’s insight that market projects. mechanisms can only function through their embeddedness in society more generally, neoliberalism requires state support and Neoliberalisation and Jakarta’s facilitation. Since the state varies from one urban transformation national context to the next, so will neoliber- In this section, we summarise recent alisation. Yet, as Peck and Theodore (2007) scholarship on neoliberalisation and neoli- emphasise in their sympathetic critique of beralising urbanism, applying it to discuss the varieties of capitalism literature, a geo- the hybrid forms taken by neoliberalisation graphical approach to neoliberalisation in Indonesia. should be multi-scalar if it is to avoid the territorial trap of methodological national- ism (Agnew, 1994). Trajectories of neoliber- Neoliberalisation: Spatialities and alisation may vary between national and informality urban scales, with those at any one scale Neoliberalism never approximates the ideal relationally affecting those at other scales. presented in the discourses of its most ardent Adopting a geographical sensibility also proponents – from Hayek to Ronald means attending to connectivity and mobi- Reagan, Margaret Thatcher and David lity: to how the socio-spatial positionality of Cameron – of a free market capitalist econ- places, and the mobility and mutation of fast omy with at most a nightwatchman state neoliberal policy, shape the local particulari- (Nozick, 1974). Karl Polanyi (1944) made ties of neoliberalisation (Peck and Theodore, this point long ago, analysing why British 2015; Sheppard, 2002). free market capitalism of the long 19th cen- Two practical implications follow from tury was unsustainable. Jamie Peck (2010) this geographical perspective. First, the vari- and his co-authors have repeatedly argued ous spatialities of neoliberalisation are inter- that this incompleteness also implies spatio- dependent. The form taken by temporal variegation: neoliberalisation in any particular territory depends not only on the local place-based neoliberalization [is] a variegated form of regu- context but also on relations with other latory restructuring: it produces geoinstitu- places and across scales (Peck and tional differentiation across places, territories, Theodore, 2010, 2015; Sheppard, 2016). and scales . as a pervasive, endemic feature Second, these spatialities are not fixed Sheppard et al. 5 contextual features: inter alia, neoliberalisa- external space, in that [it] is often viewed as tion produces spatialities that themselves a product of urban modernity and liberali- shape its subsequent spatio-temporal trajec- zation – assumed to be domains of the ‘‘for- tories. In the case of urban land transforma- mal’’ – but at the same time often visibly tion, the built environment shaped by appears to lack the products of those proj- political economic processes may itself influ- ects.’ Indeed, scholars seeking to inject a ence future political economic trajectories. post-colonial sensibility into critical urban For example, as we discuss below, greater theory regularly reference this prevalence of Jakarta’s 1990s debt-ridden urban develop- informality as exemplifying the need to pro- ment boom deepened the 1997 financial cri- vincialise urban theory (Roy, 2016; sis – dubbed Krismon in Indonesia – that Sheppard et al., 2013, 2015). But informal- toppled President Suharto. The experiences ity cannot be reduced to the habitations and attitudes of new generations of people and occupations of the urban poor. It is growing up in middle-class gated commu- also the domain of political and economic nities with their own schools and universi- elites (Alsayyad, 2004; Roy, 2005), particu- ties, self-segregated from the urban majority, larly influential in the kinds of urban land also will no doubt shape further land transformations studied here. Examining transformations. Indian cities, Ananya Roy identifies elite While we endorse a variegated approach informality as shaping urban real estate, to neoliberalisation, and how context shapes noting its role within the state (e.g. corrup- variegation, this framework reproduces neo- tion), but also how elites work through and liberalisation as the master concept. We wish around the state and market. As she argues: to move beyond this to suggest that there ‘informality exists at the very heart of the are occasions – as neoliberalisation articu- state and is an integral part of the territorial lates with other place-specific political eco- practices of state power’ (Roy, 2009: 84). nomic formations – when we no longer are Such elite vectors of informality are counte- observing a variegated form of neoliberalisa- nanced and valorised, even as those pur- tion but a hybrid formation that has features sued by the urban majority are denigrated: aspects of both neoliberalisation and its oth- ‘[E]lite informality is often legitimized . er(s) (Leitner et al., 2007; Peck, 2015). We Thus, the new towns on the peri-urban edge argue that the Indonesian political economy of Kolkata exist in direct violation of the is one such hybrid, in which neoliberalisa- state’s own proclaimed policies of protect- tion coevolves with both long-standing and ing agricultural land and wetlands . But resilient oligarchic power structures and con- rarely are they seen to be informal or ille- testations by the urban majority – forms of gal’ (Roy, 2011: 270). As we will demon- informality. strate, developers’ and officials’ practices of As scholars studying neoliberalising informality have had a distinct impact also urbanism from the Global South have pro- on Jakarta’s great land transformation. liferated, the pervasiveness of urban informality among the urban majority in metropolitan areas across the post- Neoliberalisation in Indonesia and Jakarta colony has received considerable attention The context within which neoliberalism (Alsayyad and Roy, 2004; McFarlane and entered the stage in Indonesia dates back to Waibel, 2012a). As McFarlane and Waibel Suharto’s 1965–1967 violent accession to put it (2012b: 2): ‘Informality occupies a power. This was more than a domestic tiff. contradictory and epistemologically Under President Sukarno, Indonesia had 6 Urban Studies 00(0) became a leader in the project of newly inde- the Sukarno era, whose article 6 states that pendent post-colonial nations to craft a ‘[a]ll land rights have a social function’, to ‘third world’, a third way development alter- ‘equate the people’s well-being with the native to both the capitalist first world and state’s capital-intensive developmentalist the communist second world. Suharto’s program’ (Lucas and Warren, 2013: 8). coup marked simultaneously an aversion to Large tracts of state-held land were awarded Chinese influence (anti-communist pogroms to well-connected business conglomerates, accompanying the coup killed some 500,000) along with newly created development rights and a realignment toward US foreign policy (Izin Lokasi), in the name of the national (making good on the failed 1958 US-led interest. ‘Permits would allow developers of coup against Sukarno). In the 1980s, with housing and industrial projects to sequester US politicians and policymakers initiating a vast amounts of land, ranging from 200 to ‘supply-side’ neoliberal revolution, Suharto 30,000 hectares’ (Wallace, 2008: 195). took up the neoliberal cause but tailored to Indeed: ‘By the 1990s the land issue had his autocratic, nationalist vision: become the single most prominent cause of conflict between the government and the The measures of deregulation and de- heavily repressed society under the New bureaucratization are designed to put the state Order’ (Lucas and Warren, 2013: 9). in its most appropriate place for development. In the aftermath of the 1997 Krismon, They are certainly not measures to abolish the Suharto was deposed and Indonesia’s politi- role of the state. It is definitely not a step cal economy underwent reformasi: democra- towards liberalism. The role of the state remains very important in providing guidance and tisation combined with the political encouragement to people’s initiative and crea- devolution of power to regencies and local- tivity for achieving development goals. This is ities. Seemingly also a moment for market- precisely the reason why our development is led neoliberalisation, this posed challenges implemented through planning. (Suharto, 1990) for the oligarchs who had worked with Suharto. Yet, as Hadiz and Robison (2013) By this time, Suharto and his family, sur- argue, oligarchy remains a persistent feature: rounded by army officials and a network of Chinese-Indonesian businessmen, had solidi- Despite the starkness of the ‘lessons’ of the fied power over the Indonesian political financial crisis and the huge leverage of the economy, with state officials embedded even IMF and other agencies in pressing for specific in the villages from where they reported back reforms in policy and governance, oligarchy on actions deemed inimical to Suharto’s rule. and its major players were ultimately able to survive. The key to this ‘success’ was the resili- ence of the networks of political authority and By the 1980s, . the families of powerful offi- economic interest that underpinned and defined cials and military officers . directly entered oligarchy and permeated the institutions of the the world of business in their own right as state itself. Neoliberal reformers and their allies owners of capital and as shareholders . [T]he were never able politically to dismantle these. way was led by the president’s family, which (Hadiz and Robison, 2013: 50) constructed a vast business empire that extended from banking, forestry, and agricul- ture to automobiles and petro-chemicals. Within this national context, Jakarta plays (Hadiz and Robison, 2013: 47) a special role as Indonesia’s national capital and prime metropolitan region. Since With respect to land, Suharto reinterpreted independence, the president has closely over- the Basic Agrarian Law (No. 56/1960) from seen the morphology and development of Sheppard et al. 7 Jakarta. Under Sukarno, Jakarta was rebuilt persistence of oligarchy within Indonesian into a landscape redolent of national iden- neoliberalisation. tity, autonomy and modernity. Monas (the With the slow devolution of political national independence monument) was con- power under reformasi from central to local structed, surrounded by institutions of the state officials, gaining traction after 2005, national state, and now-iconic socialist rea- Jakarta’s political economy was increasingly list statues were commissioned to mark key shaped by the imaginary and policies of its intersections of the newly rebuilt thorough- governors. This implies some deviation from fares. Under Suharto, the vast tracts of land the national agenda discussed above, handed over to well-connected developers although DKI Jakarta’s governors are made possible the development of sprawling closely linked to national political parties. new towns for the middle class, south and Fauzi Bowo (2007–2012) maintained a tight west of DKI Jakarta. Firman (2004: 354) relationship with developers. Jokowi’s brief argues that the proliferation of new towns term (2012–2014) was more populist, was ‘induced by land speculative undertak- oriented toward kampung residents’ priori- ings by several private developers on the one ties, whereas Basuki Tjahaja Purnama hand, and uncontrolled land permits granted (Ahok; 2014–2017) personalised a more by the National Land Agency (BPN) for muscular no-nonsense regime of good gov- housing development . on the other hand’. ernance, private-sector development, and The key to obtaining these land permits was evictions from ‘illegal’ kampungs. what Cowherd (2005) has dubbed the ‘Cendana–Cukong alliance’ (Arai, 2015): the The political economic dynamic close informal networks between the of Jakarta’s great land Suharto family (residing in a modest family transformation complex called Cendana in the formerly colonial elite Menteng residential district) The evolution of Jakarta’s land transforma- and Indonesian economic elites (Cukong tion can be parsed into three eras: Autocratic loosely translates from Bahasa Indonesia as nationalist urbanism of the New Order broker/capitalist/well-to-do financier). (1988–1997), post-crisis democratic neoliber- After Suharto, Indonesia’s economic alising urbanism (1998–2006), and rescaled recovery from Krismon was predicated on neoliberalising urbanism (2007–present). reviving middle-class consumption (Firman, Each era was characterised by a distinctive 1999; Fukuchi, 2000). Institutionally, Arai focus in terms of land transformations: Peri- (2015: 460) argues that the Cendana– urban new towns, DKI Jakarta shopping Cukong informal alliance was replaced by a centres, and metropolitan-wide super-blocks, more ‘formal’ coalition: a revolving door respectively. The following sections describe between GOLKAR (once the state party of these trends, analysing how they are shaped Suharto), Real Estate Indonesia (REI – the by the conjunctural context. real estate business association) and the Indonesian Chamber of Commerce and The New Order: Autocratic nationalist Industry (KADIN). ‘The consequence is urbanism meets neoliberalism (1988– very clear. It is highly implausible that the government would take measures against 1997) big businesses controlling land’ (Arai, 2015: This period was dominated by a prolifera- 461). This analysis is consistent with tion of new towns across the peri-urban Hadiz and Robison’s discussion of the areas of greater Jakarta (Hudalah and 8 Urban Studies 00(0) Firman, 2012). The majority of new towns originated in this period (Figure 1), many of them on large tracts of land ranging in size between 1000 ha and 6000 ha (Bumi Serpong Damai (BSD) new town’s). New towns were constructed for emergent middle and upper classes, by the development arms of mostly Chinese–Indonesian conglomerates and large independent real estate developers, on formerly agricultural and plantation land acquired through connections with Suharto (Firman, 1997). With households seeking multiple properties for residential and invest- ment purposes, developers saw new towns as highly profitable investments. In many cases, Figure 1. New town development trends: DKI these developers hold development rights Jakarta, 1989–2011. over much larger areas of land than have Source: Authors’ calculations. been built on to date: land banks that remain held as reserves for future development (Leaf, 1994; Winarso and Firman, 2002).1 Chinese–Indonesian conglomerates, making The general pattern of development reflects immense profits in the natural resource sec- a lack of coordination with infrastructure tor, that were turning to land and real estate planning or with the other new towns. They as an attractive investment opportunity. In also are far from major employment centres, terms of the state, Jakarta’s status as capital exacerbating Jakarta’s transportation chal- city and a major attraction for migrants lenges (Firman, 2009). meant that population growth had long out- The majority of new towns are gated stripped housing supply, and central city communities, with walls and fences enclos- congestion had become debilitating, under- ing generally low density residential areas: mining Jakarta’s image as a symbol of single family homes, row houses and some national progress. In response, the govern- high-rise apartment buildings, as well as ment sought to promote peri-urban housing commercial centres, and diverse services for development, with developers taking advan- residents that include places of worship, tage of this opportunity. The 1992 Housing recreational facilities, schools and universi- and Settlement Law introduced a 1-3-6 pro- ties (Firman, 2004). Initial developments vision (three middle income and six low were in the western part of the metropolitan income units for every high income housing area (Tangerang), followed by the south, unit), as a stick to compel private-sector expanding more recently also in the east developers to alleviate the shortage of (Bekasi Regency) where developers are affordable housing. diversifying planned industrial estates by The main neoliberal policy instrument adding residences and other commercial facilitating the realisation and sale of these property (e.g. Lippo Cikarang, Jababeka, large real estate projects was a financial and Delta Mas: Figure 2). deregulation policy (the 1988 Packet Under autocratic nationalist neoliberal- October: Pakto) allowing private banks to ism, the Indonesian economy was domi- operate alongside state banks. This policy nated by large, politically well-connected enabled the large conglomerates (e.g. Salim Sheppard et al. 9 Figure 2. Middle-class and elite real estate projects, DKI Jakarta, 1987–1998. Group, Lippo, Sinar Mas) to establish their Bumi Serpong Damai (BSD) new town. own banks, and more generally made it eas- Peter Gotsch (2009: 158) notes that ‘Bumi ier for developers to raise funds by issuing Serpong Damai emerged in a setting of stocks. By the mid-1990s many developers semi-legality and political ‘‘distortion’’’. It had become highly debt-leveraged, starting was initially developed by a consortium of new housing projects in the hope of paying ten major Indonesian developers, led by the off existing debts. Salim Group (under Sudono Salim, a.k.a. The 1992 Spatial Planning Act (Law #24/ Liem Sioe Liong), the Sinar Mas Group 1992) required local governments to produce (under Eka Tjipta Widjaja) and the master plans. Yet they were unprepared to Metropolitan Group (under Ciputra). Salim do so or even to regulate development, a brought political connections to the colla- window of opportunity that developers took boration, Sinar Mas the financing, and advantage of to build when and where they Ciputra the construction expertise. Salim pleased – effectively privatising the master was part of Suharto’s inner circle, and planning process (Dielman, 2011). They also Sudwikatmono, an Indonesian businessman, circumvented the 1-3-6 regulation: building cousin of Suharto and commissioner on sev- the required low income housing elsewhere, eral of Salim’s companies, was appointed as or not at all. BSD’s Chief Executive Advisor (Silver, Elite informality was crucial to these land 2007). The 6000-ha former rubber planta- transformations, as illustrated by the case of tion was granted to the group by Suharto, 10 Urban Studies 00(0) justified by his reinterpretation of the Basic acquisitions into a small number of large Agrarian Law, and overriding objections national-scale developers. The developers’ from Jakarta’s then-governor Sadikin to travails also contributed significantly to the personally endorse BSD (Gotsch, 2009). banking crisis engulfing the country in 1998 This was the largest new town of this era, (Firman, 2004), and thereby to the political yet to be surpassed (Figure 2). Initially, BSD crisis that brought down Suharto (Hadiz was conceived as a stand-alone, socially inte- and Robison, 2005) – exemplifying how the grated community (Santoso, 1992), con- production of space can shape political eco- forming to Indonesia’s 1-3-6 ratio of high, nomic trajectories. middle and low income housing. Although As developers began to recover finan- the government underwrote the financing of cially, the limited investment that occurred BSD with ‘enormous government subsidies’ in the new towns largely focused on develop- (Gotsch, 2009: 153), this was not deemed ing facilities for current residents, such as adequate to support this initial vision. Its hospitals, schools, and universities marketed developers ran into trouble during the as matching international standards. With Krismon (receiving massive government the lack of employment opportunities support to rescue them from bankruptcy), nearby, and worsening traffic congestion Sinar Mas Group bought out their partners, between the new towns and Jakarta, develo- and the concept was changed to a more pers saw providing such facilities as vital for exclusive new town for families working in retaining new town residents. Jakarta, marketed as ‘Big City – Big The bulk of property sector activity Opportunity’. BSD also played an important between 1998 and 2006 occurred in DKI role in shaping the future of land develop- Jakarta, and focused on shopping centre ment elsewhere in the metropolitan area. development. While Ratu Plaza, the first Having learned that such ventures are highly Western-style upscale shopping centre, profitable, its partners shifted substantial opened in 1980, there was a rapid expansion resources into real estate development. of shopping centres and trade centres within DKI Jakarta after 2000 (Figures 3 and 4).2 This boom reflected a series of intersecting Reformasi I: Towards a democratic factors. First, the promotion of consumption neoliberalising urbanism (1998–2006) was an important part of the national eco- The 1997 Krismon had a dramatic impact nomic strategy to recover from the Krismon. on the evolution of real estate development Second, shopping centres provided safe, air- projects in Jakarta. No new town projects conditioned consumption and quasi-public were started during this period; the only spaces for an emerging middle class that had peri-urban new development projects were experienced street violence during the within the industrial estates to the east. As downfall of Suharto. Third, DKI Governor discussed above, the aggressive expansion of Sutyoso took advantage of the power new towns prior to the Krismon had left granted by the 1999 Law on Regional developers heavily indebted to domestic and Government, which decentralised power, overseas banks. By 1998 many developers authority and responsibility to lower tiers were facing bankruptcy, and financial trans- of the state, to award favoured developers actions in the property sector fell by two- building permits and higher floor area thirds between 1996 and 1998 (Firman, ratios (FAR) for shopping centre construc- 2004: 330). In addition, the property indus- tion.3 By the end of this period, shopping try consolidated through mergers and centres were overbuilt to the point that a Sheppard et al. 11 Figure 3. Middle-class and elite real estate projects: DKI Jakarta, 1987–2007. Source: Authors. moratorium on further construction was under discussion (eventually implemented in 2011). Toward the end of this period, realising that new towns were failing to serve the metropolitan housing problem, successive presidents introduced ambitious housing programmes. The Million Houses Program (2003) and the 1000 Tower Program (2006) promoted the construction of high-rise apartment buildings through public–private partnerships. Both programmes were short- lived, however, lasting little longer than the term of the politician promoting them. The 1000 Tower Program was an initiative of Jusuf Kalla, Vice President of Indonesia under Yodhoyono, who pressured develo- Figure 4. Shopping centre development trends: pers to build 1000 towers of affordable high- DKI Jakarta, 1990–2014. rise apartments within five years in major Source: Authors’ calculations. 12 Urban Studies 00(0) between 250,000 and 1 million m2, with floor area ratios between 4 and 20. This entailed a marked densification of land use in DKI Jakarta, located closer to central Jakarta than the new towns (Figure 6). After 2010 the superblock trend also spread to new towns, where developers began to build high-rise multi-use Central Business Districts such as CBD Alum Sutera (Alum Sutera), Millennium Village and Orange County (Lippo Group), and Q-Big/ BSD city (Sinarmas Land). To attract buy- ers, superblock developers advertise their Figure 5. Superblock development trends: DKI projects as integrated and diversified devel- Jakarta, 2006–2017. opments, providing an ever-increasing vari- Source: Authors’ calculations. ety of facilities from cradle to grave in-place, with ever expanding floor area ratios – super Indonesian cities, with 60% in Jakarta.4 Yet space-grabs (Table 1). the programme was terminated in 2011, These superblock developments are often once a new Vice President came to power. marketed under US place names, such as Even though only a small fraction of the ‘Orange County – the new California City’, proposed housing was actually built, develo- supplemented by imagery promising new res- pers nevertheless took advantage of the 1000 idents the Western urban lifestyles they Tower Program to finance, inter alia, the aspire to. Much of this inter-referencing Kalibata City super-block development in (Bunnell, 2015) cites global metropolises south Jakarta (Kusno, 2012; Pathoni, 2012). such as New York and Los Angeles, a place- marketing that brings global cities to Jakarta while promoting Jakarta’s own status as a Reformasi II: Rescaled neoliberalising world-class global city – ‘worlding’ Jakarta urbanism (2007–present) in the image of global urbanism (Roy, 2011). By 2007, developers that had weathered the This superblock building boom has added Krismon – Ciputra and the development some 10 million m2 of housing, commercial arms of large Indonesian conglomerates – space and offices since just 2006. This con- started to buy and develop land for multiple tinues to be fuelled by a seemingly insatiable real estate projects, dubbed ‘superblocks’ Indonesian middle- and upper-class demand (Figure 5). A superblock is an integrated for multiple properties. Particularly since the megaproject that includes residential, com- stock market crash that accompanied mercial and recreational facilities within a Krismon, when many lost wealth overnight, single development (ranging in scope from a property has come to be regarded as an single block to an extensive cluster). The first attractive investment option also for house- were built in the 1980s (Arai, 2001), but they holds. The development arms of conglomer- became the dominant model in this time ates foster potential buyers through low period. Superblocks are unevenly distributed down-payments and mortgages, via their across DKI Jakarta, with concentrations own corporate banks or arrangements with around major traffic nodes in Central and Indonesian state-owned and private banks. South Jakarta. Their gross floor area ranges This speculative investment continues Sheppard et al. 13 Figure 6. Middle-class and elite real estate projects: DKI Jakarta, 1987–2016. Source: Authors. unabated, notwithstanding attempts by the and demand proceeds apace: 17 offshore government to dis-incentivise households islands have been gazetted for development from purchasing multiple properties by off Jakarta’s north shore, and in May 2017 mandating increased down-payment require- Lippo announced a massive new 2200-ha ments for second and third properties, and a city called Meikarta (Beyond Jakarta), to be luxury property tax. built next to Lippo Cikarang (Figure 6), and Large developers have come to expect a billed as costing US$20.8 billion (http://mei 30% rate of return on their investments, and karta.com/dashboard/). Developers already have little difficulty in accessing domestic report massive sales to households, years in and/or overseas funds to initiate these proj- advance of completion. ects. Global finance has turned to property This period saw a further concentration and infrastructure development as an attrac- of power in the real estate sector in Jakarta, tive investment option in emerging markets with the development arms of large corpora- in the context of low interest rates in devel- tions such as Lippo, Bakrie and Sinarmas oped economies, and by 2012 Jakarta had dominating the market, especially in the new become one of the hottest property markets towns. Their power and authority was indir- in the world (Knight Frank, 2014). Luxury ectly increased by the Spatial Planning Law real estate investment in Jakarta offered an #26/2007, modified by Presidential Decree estimated 37% return in 2012–2013, the No. 54/2008, which stipulates that provincial highest in the world (Chow, 2014). Supply and municipal governments must develop 14 Urban Studies 00(0) Table 1. Super space-grabs: The expanding ambition of superblocks. St. Moritz, Puri Kembangan, Millennium Village, Orange County, West Jakarta Lippo Karawaci, Tangerang Lippo Cikarang, Bekasi Regency Regency (phase one) Year 2008 2015 2016 Size 12 ha, 1 million m2 70.45 ha total. 322 ha total. Phase 1: 20 ha, 1.95 M m2 CBD: 82.3 ha, 16.5 M m2 Density FAR: 8.33 FAR: 9.75 FAR: 9 11 in 1 18 in 1 32 in 1 1 Condominium (luxury) Sky park Sky park 2 Five-star hotel Shopping mall Shopping mall (390,000 m2) 3 Club house F&B strip Condominium (luxury) 4 Exotic spa Office tower Shopping street 5 Exhibition Centre Hotel 5* Iconic office tower 6 Shopping mall Boutique hotel Office tower 7 Sea World Medical city Hotel 5* 8 Office tower Condominium (luxury) Convention Centre 9 Wedding chapel Serviced apartments Serviced apartments 10 International hospital Senior homes Sky lounge 11 International grammar school University Sky bar 12 School Club 13 Urban & Sky Pedestrian Trail Cinemaxx 14 Convention Centre Boutique hotel 15 Art Museum & Gallery Fine dining 16 Resort Country Club Entertainment centre 17 Luxurious spa Wellness centre 18 Grand chapel Grand chapel 19 Soho 20 Japanese Cultural Centre 21 Korean Cultural Centre 22 Senior homes 23 Condotel 24 Outdoor recreation centre 25 Home furnishing centre 26 University 27 International school 28 National school 29 Dormitory 30 Japan College 31 Health City 32 Helicopter service Source: Authors. their own master plan and zoning regula- model. They draw up master plans and zon- tions. With many municipalities still ill- ing regulations, and contract with the state equipped to do so, developers have stepped to operate and maintain infrastructure after in, empowering themselves by providing the they return it to public hands (Dielman, necessary public infrastructure for their 2011; Winarso, 2000). Taken together, this developments on the build–own–transfer preemption of spatial planning amounts to Sheppard et al. 15 an ongoing privatisation of the urban devel- Consider the case of Lippo. Uniquely, opment process (Shatkin, 2008). Indonesian companies maintain a Board of Developers’ lobbying also shaped the Commissioners. Commissioners, appointed by 2011 New Housing and Settlement Act company executives or at a general sharehold- (Housing and Settlement Law #1/11), which ers meeting, are appointed to carry out general relaxed the 1-3-6 restriction on housing to 1- supervision of the company, advise the board 2-3. This exacerbates the shortage of afford- of directors, examine annual reports, and able housing, and even when developers approve budget plans. Four of Lippo’s Board comply with the regulation they often build of Commissioners have held positions in gov- on cheaper land separated from their specta- ernment: President Commissioner Theo L cular super-block projects. In order to Sambuaga (minister of public housing during address the housing shortage, in 2015 the Suharto era, Golkar Party), Vice President President Jokowi proposed his own One Commissioner Surjardi Soedirdja and Million Houses programme. The first mil- Independent Commissioner Sutyoso (gover- lion is supposed to be supplemented by a nors of Jakarta 1992–1997 and 1997–2007), further million built by the private sector, in and Agum Gumelar (former minister of trans- return for being granted higher floor area portation and army general). Independent ratios for other developments, illustrating Commissioner Farid Harianto, an economist, the pervasiveness and popularity of public– served as both special staff for the Vice private partnerships. By the end of 2015, President of Indonesia and Deputy Chairman 60% of the public component was reported of the Indonesian Bank Restructuring Agency to have been built nationwide, with plans to (1998–2000) (https://www.lippokarawaci.co.id/ expand it to ten million. leadership-team/board-of-commissioners, As discussed above, elite informal net- accessed 19 April 2017). Such Commissioners works continue to play an important role in are exceptionally well-placed to informally the reformasi era, becoming larger, more link Lippo with national and local politicians decentralised and more complex. Central and political parties, state agencies and the actors in these networks are developer con- banking sector. glomerates, business institutions such as Real Estate Indonesia and the Indonesian Chamber of Commerce (KADIN), govern- Internationalisation and global ment officials and employees, and political consumption parties. A revolving door sees individuals Since the 1980s, Jakarta’s internationalisa- moving between private-sector organisa- tion – the level of foreign involvement in its tions, political parties, government agencies, land transformations – has mirrored and the military. Indonesia’s uncertain trajectory of political- In order to sustain their large-scale prop- economic restructuring and uneven global erty development, facing a change in politi- integration. Under autocratic national cal landscape from a national to a local urbanism (1988–1997), Suharto liberalised permit system with enhanced local auton- the investment and finance regime under the omy since 2005, many large developers seek auspice of IMF reforms, and global capital alliances with elite political parties and flows increasingly shaped the broader retired military generals. An effective way to metropolitan landscape. Foreign investment influence local officials is via national-scale was dominated by Japanese and newly elites linked to the major political parties industrialised South Korean, Taiwanese and that these officals affiliate with. Singaporean firms facing rising domestic 16 Urban Studies 00(0) production costs, investing in labour- Pondok Indah and the World Trade Center intensive manufacturing for exports complex), subsequently acquired by competi- (Lindblad, 2015). These investments sup- tors Sinar Mas and the Berca Group. ported the city’s emerging spatial develop- Restrictions on foreign property ownership ment pattern, with industrial estates and were somewhat loosened in 1996, allowing for- new towns on the periphery, and business eigners to purchase 25-year leaseholds, renew- services-oriented development in the CBD able for up to 70 years. The Susilo Bambang (Arai, 2001; Firman, 1998). While Yudhoyono (SBY) presidency (2004–2008) Indonesia’s 1960 Basic Agrarian Law pre- sought to improve the investment climate vents foreign nationals from obtaining free- through economic reforms, but ongoing regu- hold land rights, companies registered as latory uncertainty at local and national scales Indonesian corporate entities could effec- kept international investments in Jakarta at tively overcome this restriction, and a num- bay, and infrastructure projects such as the ber of Asian developers established an early monorail and Mass Rapid Transit languished. presence in the property market in the 1980s As investor confidence slowly returned, and 1990s. A notable example is the buoyed by the China-driven commodity boom Japanese contractor and real estate develo- and growing middle-class demand for upscale per Kajima Corporation, which partnered global consumer goods, proliferating shopping with various conglomerates and political centres recruited major international retailers elites in a plethora of developments across as anchor tenants, including Debenhams, the metropolitan area. These included the Sogo, Metro, Lotte and Seibu. iconic, upscale Plaza Senayan shopping and Reformasi II (2006–present) witnessed living complex at the heart of Jakarta’s increased foreign involvement and foreign CBD, whose shareholders included Chinese– investment, as investors from around the Indonesian and Indonesian businessmen and globe turned to higher yielding assets in one of Suharto’s daughters (exemplifying Indonesian and other emerging capital mar- the Cendana–Cukong alliance). The rapid kets after 2008. With global property mar- growth of foreign banks and loans in the kets increasingly interlinked, shifting local mid-1990s also supported Indonesian devel- investments reflect macro-economic condi- opers’ speculative new town expansions, cul- tions and changing property market minating in the financial crisis that brought dynamics in Jakarta and abroad. Seeking to the economy to a standstill (Firman, 1998). boost a slowing economy, the Jokowi Indonesia witnessed significant capital administrations further eased restrictions on outflows during Reformasi I (1997–2006), foreign property ownership in 2015 with foreign direct investment only returning (Regulation 103/2015), allowing non- to pre-Krismon levels in 2005 (World Bank, Indonesians holding residency permits to 2016). Indonesia underwent political- purchase 30-year leases, renewable for up to economic restructuring and was mired in tus- 80 years, on properties valued at more than sles over the Indonesian Bank Restructuring 2 billion Rupiah (US$150,000), with owner- Agency’s sale of bankrupt conglomerates’ ship transferable to their descendants. Yet assets, especially the large bank holdings property-related foreign direct investment in through which they had financed their prop- greater Jakarta has maintained a distinct erty developments, and investors opted for regional dimension: dominated by Japanese other ASEAN markets.5 Salim Group, the and, to a lesser extent, Singaporean inves- hardest hit, was forced to divest major real tors, this period saw increasing penetration estate assets in Jakarta (such as BSD, of Chinese capital. Sheppard et al. 17 Japanese capital continues to dominate notwithstanding lingering anti-Chinese the metropolitan landscape, from conveni- xenophobia, Chinese capital also is becom- ence stores and shopping malls to infrastruc- ing a significant market actor in Jakarta’s ture development and manufacturing. real estate and infrastructure initiatives. Japanese conglomerates (sogo-shosha) such Beginning under the presidency of SBY, and as Sojitz, Mitsui, Itochu, Mitsubishi, increasingly under the present Jokowi Marubeni, Sumitomo and Toyota Tsusho administration, Indonesia opened itself to have been particularly active in redeveloping and actively pursued Chinese investment. the industrial estates to the east, partnering Changing market conditions in China com- with the development arms of Indonesia’s bined with an overheated real estate market conglomerates. Such ventures reflect larger has driven Chinese investment abroad, now Japanese outsourcing strategies, attracting a under China’s Belt and Road Initiative. host of Japanese manufacturers (particularly Seeking to build on this, the Jokowi admin- automotive) to take advantage of Jakarta’s istration has invited Chinese bids to finance large consumer base, as well as more capital- and build Indonesian infrastructure, often in intensive export-oriented manufacturing. fierce competition with the Japanese, such as The proliferation of Japanese motorbikes the Jakarta–Bandung high-speed train proj- and automobiles on Jakarta’s gridlocked ect. In the process, Chinese developers, con- streets is facilitated by Japanese leasing com- tractors and banks are linking property panies offering consumer credit, ensuring deals with a variety of local groups across Japanese capital’s involvement across the the metropolitan area. entire production and consumption cycle. As readily available space for superblocks Developers such as Tokyu Land are also dwindles within city limits, in collaboration building residential high-rises, office towers with foreign investors Indonesian developers and hotels in the metropolitan core, and in are building dense mixed-use complexes and new towns to the east and west, while office towers in Jakarta’s Sudirman Central Japanese consultancies and contractors Business District (golden triangle), also build the Mass Rapid Transit system criss- expanding to areas strategically positioned crossing Jakarta, financed by the Japanese to take advantage of emergent infrastructure Bank for International Cooperation. developments and transit links (e.g. the Singaporean property firms also have sig- emerging business district of Simatupang). nificantly expanded their presence in In peri-urban areas, seeking to leverage their Indonesia since 2007. The Singapore govern- land banks, Indonesian developers have ment implemented a number of measures entered into ventures with foreign partners aimed at preventing a speculative bubble in to develop branded clusters within new the overheated Singaporean property towns and integrated developments. market, driving investments to more lucrative Consider Orange County, one of Lippo’s markets abroad. Singaporean property giants, flagship developments within its 3000-ha such as CapitaLand, Keppel Land, City Lippo Cikarang integrated estate, comprised Developments, Pontiac and the sovereign of industrial, residential and, commercial wealth fund GIC, have completed real estate complexes and located along Jakarta’s deals in Jakarta, partnering with Indonesian Eastern Development Corridor (Figure 6). groups or undertaking their own develop- Much of the 1990s and early 2000s saw pie- ments in office and residential markets. cemeal development of industrial and semi- Coinciding with China’s emergent geopo- detached housing clusters in Lippo litical and geoeconomic influence, and Cikarang. Lippo, founded in 1987, turned to 18 Urban Studies 00(0) mixed-used superblocks with the uptick in influence of neoliberalising global urbanism, economic growth and capital flows during the large Indonesian firms dominating the Reformasi II, selling cosmopolitan lifestyles private development industry have been the (like many of its competitors). Lippo has major players shaping the transformation of used a variety of mechanisms to finance this the formal real estate market in greater development including corporate bonds, Jakarta. National and Jakartan state institu- rights listings, and joint ventures with for- tions – intimately connected given Jakarta’s eign companies, increasingly a model for all position as national capital – continually large Indonesian developers. The 322-ha have walked the tightrope of enabling the Orange County is a joint venture between development industry while also attempting Lippo and Mitsubishi Corporation: a 32-in- to contain excessive land speculation through 1 ‘new global city’ (Table 1) featuring a cen- a variety of regulations, laws and policies. In tral business district with high-rises and the breach, however, state institutions have shopping malls. Taking design cues from prioritised the interests of private capital, as such global city centres as Hudson Yards in in the consistent failure to stimulate private- New York, Union Square in Hong Kong sector provision of housing affordable to the and Roppongi Hills in Tokyo, Orange urban majority. Second, reflecting Indonesia’s County also has attracted investment from hybrid political economy, elite informal the Japanese Toyota-Tsusho, Tokyu Land networks connecting state actors with the and SankoSoflan to develop luxury towers development industry remain vital to the rea- and hotels replete with Southern Californian lisation of real estate projects. place-branding: Newport Tower and Third, notwithstanding state restrictions Pasadena Suites. Outside Orange County, on non-Indonesian property ownership, Lippo Cikarang’s various industrial clusters large real estate projects are not simply dom- include a Japanese Small and Medium inated by Indonesian capital. Jakarta’s real Enterprises Center, and an industrial park estate industry has long been characterised dedicated to Chinese manufacturers in part- as homegrown, dominated by domestic cor- nership with Shenzhen Yantian Port Group porations and finance. Yet there has been a (a state-owned Chinese port-operator) and dramatic increase of foreign involvement and Country Garden Holdings (one of China’s investment in the development industry in largest developers). recent years, particularly under Reformasi II. Non-Indonesian sensibilities also dominate the architecture and design of real estate Conclusion projects, generally marketed as offering the While greater Jakarta’s urban land transfor- Indonesian middle class a Western (e.g. mation parallels transformations in large Californian) and Singaporean urban lifestyle. metropolitan areas across the region now These shared features played out differ- known as the Global South, the particular ently across the three political eras analysed form this has taken in Jakarta reflects the here, generating distinct types and geogra- city’s shifting conjunctural positionality phies of real estate development. Under within global-scale political economic pro- autocratic nationalist neoliberalisation, cesses and Indonesia’s hybrid political Jakarta’s urban land transformations were economy. dominated by low-density new towns Three persistent features stand out located somewhat haphazardly across the throughout Jakarta’s urban development peri-urban periphery, on land that politically trajectory since 1988. First, reflecting the connected developers had been able to Sheppard et al. 19 access and bank through the Cendana– a persistent path dependency in the urban Cukong alliance. The influence of foreign development trajectory, whereby each era is capital was muted. After 1997, Indonesia layered on the one before. The developers entered a crisis triggered by international favoured by Suharto remain influential finance. Suharto was deposed, and the first today and will no doubt shape the ongoing ten years of reformasi were marked by slow- transformation of Jakarta into a mega- moving democratisation and devolution of region. Lippo’s recently announced mas- power from central to local state authorities, sively ambitious Meikarta city project, with as Indonesia sought to extricate itself from sub-developments inter-referencing different economic crisis by stimulating middle-class world regions and cities, is the latest incar- consumption, and its debt-ridden developers nation of developer- and global finance- sought to survive bankruptcy. Elite informal driven urban land transformations. networks decentred from the President’s office and became more complex, entailing Acknowledgements revolving doors between real estate, national We acknowledge the assistance of Meyriana political parties and the military. Land Kesuma and Nur Mawaddah for their help with transformations were muted, dominated by data collection, and Andi Saputra for cartography. overbuilt privatised spaces of upscale shop- ping centres within DKI Jakarta, anchored by fashionable foreign brands. Funding By 2007, reformasi was deepening, the We acknowledge the intellectual and material major real estate developers had written off support of UCLA and Tarumanagara University, their debt and were ready to reinvest, elites and the US National Science Foundation (grant and middle-class consumers were speculat- number BCS-1636437). ing increasingly in real estate, and devolu- tion was beginning to bite. Developers Notes figured out how to influence local authori- 1. A land permitting system administered by the ties via reconstituted informal networking National Land Agency (BPN) enabled devel- with political elites, triggering a seemingly opers to aggregate small individually owned insatiable boom of larger and ever more plots into land banks (Leaf, 1994: 345). 2. Whereas space in shopping centres is leased, spectacular, full-service superblock develop- in trade centres it is owned by retailers/ ments that offer the elite and middle class wholesalers. respite from the perceived chaos of the rest 3. The FAR is the ratio of a building’s gross of Jakarta. Foreign firms’ partnerships with floor area (GFA) to the area of land on which local developers deepened through invest- it is built. ments in branch plants in industrial areas, 4. In addition to political power – as minister expanded opportunities for foreign anchor under the Wahid and Megawati administra- tenants in shopping centres and educational tions and vice president under the SBY and institutions in superblocks, and bidding on Jokowi presidencies – his Kalla Group is major infrastructure projects also serving involved in construction, engineering, energy, property, and finance, and he cultivates exten- large real estate developments. The regional sively informal networks (e.g. as regional focus on international capital expanded chairman of the Indonesian Chamber of from Japanese toward Singaporean and now Commerce). Chinese capital. 5. 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