Delivering Development: The ‘Carpe Diem’ of Indonesian Smart Cities in Times of Crisis
Building a cohesive, participative community can be difficult in today’s world. As major cities are experiencing societal challenges — spanning from the rapid population influx, the traffic congestion problems, to the demand for better public health and services — governments integrate technology and sustainability metrics in order to improve living experiences in the form of ‘smart cities’, and Indonesia is no exception. The drive to make Indonesian cities ‘smarter’ starts with the 100 Smart Cities Movement, initiated in 2017 and 2018 by the Ministry of Communication and Information Technology. In addition, the march for integrating technology into urban development was further solidified after the Japanese government had allocated a fund worth US$2.4 billion as well as encouraged Japanese companies to formulate smart city roadmaps in 26 Southeast Asian cities — as part of the ASEAN Smart Cities Network (Nikkei Asia, 2020).
Even so, several puzzling problems remain: Who is responsible for the funding other than the national government? Is there something bigger at play? This article analyses smart cities’ development direction for Indonesia and the geopolitical concerns regarding its funding.
Smart Cities = A Definite Direction, Not A Selection
In the era of neoliberal globalisation, Indonesia’s major cities have experienced a higher urbanisation pace annually because people from all over the country — and even from abroad — are seeking economic security, material well-being, and equality of opportunity. However, better options are not synonymous with better living conditions. Data from Jakarta’s Cepat Respons Masyarakat (CRM) shows that there were 137.776 reported issues throughout 2020 and 13.312 reported issues in the January-March 2021 period — with the majority of problems correlating with governance and environment (Indrawan 2021; Tobing, 2021). Despite the seemingly never-ending problems, CRM since 2014 accommodates thousands of complaints in the capital — proven by the 99.85% and 98.83% success rates, respectively — through applications, e-mail, and hotlines as available complaint channels (Indrawan 2021; Tobing, 2021). This case study shows better living conditions today are ensured with technology — enabling insight into residents’ characteristics — in the form of ‘smart cities’.
Echoing Gascó-Hernandez (2018), “smart city is still a fuzzy term that is not used consistently.” On the one hand, Jakarta adopted the concept back in 2014, focusing on better complaint management, and the city is also viewed as the pioneer of Indonesian smart cities with the success of CRM. On the other hand, complaint management is not the only problem faced in other major cities, as several cities like Bandung and Bogor aim for better connectivity due to their unavailability of seaports, implying that different cities require different approaches in order to be ‘smarter’. Therefore, the Ministry of Communication and Information Technology initiated the 100 Smart Cities Movement, which encourages the creation of resilient and sustainable living environments for 83% of the national population who will live in urban areas by 2045 (Mahesa et al., 2019).
What is intriguing is that smart cities actually go beyond tech integration. In the Smart City Master Plan Guidance Book, it is outlined that the movement embraces the unique attributes of each cities’ condition while outlining six essential pillars: smart governance, smart branding, smart economy, smart living, smart society, and smart environment (Mahesa et al., 2019). In the short run, ICT-based governance shall promote iterative improvement in public services and goods — such as, efficient resources and energy management, adequate working and learning conditions, as well as improved mobility via public transportation system. In the long run, without losing their local roots, major cities shall possess citizens with higher productivity and competitiveness — promoting innovative economies with faster, sharper responses for the ever-changing urban challenges in the present and future.
Pinpointing Politics of Competition in Southeast Asia and Indonesia
The decision to develop smart cities is inseparable from the regional technology race and the global climate change commitment. As Southeast Asia consolidated its role as one of the key anchors of the global economy after encountering robust growth and a more integrated regional economic system, great power competitions remain, especially the one between China and its neighbour Japan. Both East Asian countries are front-runners in building and deploying technologies, enhancing their comparative advantage if such techs are exported and implementing a clean energy system. Slowly shifting away from coal finance, Southeast Asia countries depend on East Asian fundings to maintain momentum towards achieving net-zero, generating an opportunity worth US$205 billion — 2.6 times larger than the coal market in the past decade — for business magnates from China, Japan, and South Korea (Greenpeace International, 2020).
What stands in the competition to the East Asian competition in Southeast Asian green shift is their influence on global standards so that their products can compete successfully according to their rules. With China submitting their proposals for global smart city standards to the International Organization for Standardization (ISO) and the International Electrotechnical Commission, Japan is growing wary due to the proposed usage of facial recognition cameras and drones, with both having the potential to invade privacy — similar to the accusations that China is utilising the same technology in African Union countries (Akiyama, 2020; Dahir, 2018). China has been investing billions in African countries, and Chinese tech is utilised in the African Union headquarters. When a backdoor — downloading data from the Union’s system and sending it to a server in Shanghai — is discovered by member states, one message is definitely clear: Chinese tech can be utilised to tap into the networks of developing countries, and obtained information could be helpful to track and analyse their constituent’s behaviour. In other words, The Sleeping Giant is prepping to wake up by developing techs that can identify times to provide help when there is potential for crime, protest, or violence — which should remain as classified information — and expanding its norms to the international system, which spells trouble for Japan and other countries.
China has been gaining ground on the international political stage, and they are hardly subtle. Clash against its Southeast Asian neighbours over the South China Sea, reinforcement of their claim on Taiwan, and many other moves. The author previously wrote an article on China’s rise in technological development. China is reaching for dominance. With China’s recent manipulation records, it seems the cost of receiving funds from China is ‘more than what is written on the contract. However, there is a middle power that most Sino-American narrative lacks. Japan has been increasing its activity on the geopolitical stage as well.
Despite losing the standard-setting race to China, for now, Japan has taken a different approach to garner influence in two levels: regional level and national level. First, as Japan aligns itself with the Western countries’ stance that there should be a balance between privacy and efficiency, it focuses on Southeast Asia by setting up funds — worth 50 billion yen from the Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development, in addition to the 200 billion yen from the Japan Bank for International Cooperation — and creating sustainable development projects managed by joint ventures with Japanese companies and local stakeholders in 26 ASEAN major cities (Nikkei Asia, 2020). This funding scheme shows Japan’s strategic interaction against China’s assertive move because it (1) solidifies the ASEAN-Japan strategic relations in the economic sector and (2) allows better access for Japanese stakeholders to be more involved in Southeast Asian urban development projects without having to perform surveillance by tapping into databases of the ASEAN community and analyses their behaviour patterns.
Second, Japan has shown a better portfolio in development funds than China, which is evident in Indonesia’s smart city development projects. Lately, expanding their climate change commitment into the Indonesian smart city projects is Mitsubishi Corporation. One of the companies striving to accelerate their endeavours toward decarbonisation, Mitsubishi had planned an ammonia fuel project with three stakeholders — Japan Oil, Gas and Metals National Corp., Institut Teknologi Bandung, and Panca Amara Utama — to introduce an alternative to coal for power generation: ammonia-coal co-firing that can suppress greenhouse gas emissions without causing additional costs for equipment modifications (Ando, 2021). In addition, Mitsubishi also announced plans for improved connectivity between Jakarta’s satellite cities and the central business districts, taking an approximately one-hour train ride, with transit complexes (Nikkei Asia, 2021). Japan’s commitment, and that of Mitsubishi, to decarbonisation trickled down to Indonesia and its emergent economy from various collaborations in urban development — ones that could stimulate green industries without having to crash the national budget. Harnessing technology to address complex societal problems, Indonesia is definitely heading in the right direction on its march towards a better citizen experience with smart cities.
Meanwhile, China has struggled to provide similar aid to Indonesian smart cities projects, despite Indonesia having been considered a fundamental asset for advancing the Belt and Road Initiative (BRI) since 2013. Indonesia has been cautious with the BRI worth almost US$95 million by proposing a business-to-business approach with low-rate loans for investment and with a robust partnership with local stakeholders rather than taking direct loans from the Chinese funding scheme (Asmarini & Jefriando, 2019). Seeking renegotiation of the proposed funding scheme may have taken a toll on Indonesia’s better connectivity, especially with Jokowi’s goal to improve maritime connectivity under his leadership. However, a renegotiation has implied two vital points: (1) Indonesia proposes a negotiation to enable its government to play a more significant role in the development and maintaining cooperation with China simultaneously, and (2) Indonesia prefers the funding scheme from Japan rather than that of China because the government and stakeholders can diversify the national economy with minimum interests and surveillance risks — as Japan has previously selected Jakarta as one of the 26 cities receiving Japanese development assistance in an ASEAN meeting (3) having a reduced dependence on China while still being on good terms is the primary goal. Having a dispute with (arguably) the dominant regional power can (probably) be costly and detrimental towards Indonesia’s other venues of development efforts.
A ‘Recalibration and Repeat’ for Indonesian Smart Cities (Further) Steps
Setting aside the China-Japan competition for comparative advantage, Indonesia now has four alignment choices: with both countries, with Japan only, with China only, and with nobody. Surpassing 1 million confirmed cases earlier this year and suffered its first recession after 22 years in 2020, Indonesia has been severely affected by the global pandemic. New infrastructure projects will not only create jobs in the construction sector. Still, they will also reduce territorial inequalities — allowing it to unlock post-pandemic economic growth. In making such choices, Indonesia must be strategic because one wrong move could halt its road to become the seventh-largest economy in the world by 2030 — from its position in the nineteenth place back in 2019 — and to bring 100 Smart Cities Movement goals into reality (Agarwal et al., 2021).
With policy choices being mapped, another question arises: Which one is the most strategic for Indonesia to carry out its smart cities vision? Indonesia has been incredibly calculative of Japan and China’s funding schemes and has shown high enthusiasm in building better connectivity and sustainable solutions in urban living environments. After reallocating its national budget for pandemic relief packages, it seems irrational for Indonesia to not take any sides for the sake of national development. In addition, siding with one of the countries is not an entirely strategic move as well, considering both countries have close diplomatic ties to Indonesia and comprehensive portfolios in economic and development areas. Therefore, the most strategic policy choice that Indonesia can apply is aligning with both countries, for this enables Indonesia to benefit from a geopolitical dividend where (1) the Chinese assertiveness can push Japan to engage more effectively with Indonesia and (2) the Chinese project can still be carried out without abandoning Indonesia’s control on its national projects — proven by the $6 billion Jakarta-Bandung High-Speed Rail that is going to be completed in 2023 — and proceeding with the involvement of Japanese stakeholders in separate smart city development projects (Asmarini & Jefriando, 2019). In return, the policy choice seems to be a win-win solution for all three countries — with Indonesia providing better living conditions for its citizens, Japan and China increasing their influence via their funding schemes, and Indonesia-Japan and Indonesia-China relations being maintained.
Creating a futuristic smart city is never an easy task, especially with Indonesia and its high population density. However, the integration of technology in urban development is an inevitable move, pioneered by Jakarta in 2014 and previously elevated into a national movement by the Ministry of Communications and Information Technology. The commitment to make cities smarter was strengthened by the China-Japan competition for comparative advantage, accelerating Indonesia’s transition towards a sustainable economy and energy in urban environments. Amidst the global pandemic — in which Indonesia has utilised its national budget (even reallocated its budget) for pandemic relief packages — Indonesia has to keep the momentum going, one that maintains the adoption of technology without running out of national funds. As Indonesia currently is an emerging economy, smart cities provide innovation-based solutions for challenges of urbanisation and globalisation, and such solutions promote peace and sustainability for the urban population — not only today but also tomorrow.
However, Indonesia must also maintain its geopolitical leanings carefully. Having no foreign investors is too costly while choosing one over the other comes with its own caveat. Balancing the political concerns will be challenging but doable.
Written by: Allysa Ramadhani
Edited by: Rama Vandika
Illustrated by: Della Annisa
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