CHAPTER 1. INTRODUCTION Before 1970s, the development strategies at rural development became national and international institutions concern.

By creating better work and living conditions in the rural area, they hoped that the peasant would stay where they were and stop migrating to the ever-growing cities. he high of pull factor to the city i.e. the opportunity to get a better life remains a ma!or problem for developing countries. he migration to the cities cause an urban poverty and the allocation of more resources to the rural areas would strike at the root of the structural poverty "uestion. #n reality the massive investments in agriculture. #n many intermediate cities and small towns it is still the case that the demographic increase is primarily caused by an influ$ of migrants who arrive from the surrounding rural areas. he natural increase of the population has had a larger impact on the population growth than the net effect of migration. By now, the growth of urban poverty in the metropolises and primate cities has become main issue. %onsidering the urban problems in developing countries, world bank formulated some urban development policies. &ith those policies, &orld Bank "uickly became the most authoritative international development institution. he world bank urban lending programs set the scene for the urban planning and management approaches of the many developing nations that contracted such loans. 'or decades a paradigm on urban development policy shift in order to overcome urban problems. he considerations that affect a paradigm shift include( a. )edistribution with growth and basic needs approaches as new consideration of policy which influenced the former approaches. b. he growth of urban productivity and the strengthening of the financial sector. c. *romulgation of administrative decentralisation laws. d. +ustainable development. e. he strengthening of capacity and responsibility of local government ,good local governance-. f. *ublic private relationship. g. #mprovement of citi.ens/ influence in local decision making through participatory planning and participatory budgeting models.

he changing views on urban development and policies is shown in the table below( 1

AGENDA SETTING 1900s

CONCEPTS 1oderni.ation

STRATEGIC FOCUS *hysico-spatial housing +patial engineering planning

POLICIES AND PRACTICES Blueprint planning 2ousing supply for the middle classes 3viction of s"uatters

and public sector social

1970s 1970 2abitat 5 1

+elf-help housing school 4hoising as a verb/ 6ffordability %ost recovery )eplicability

2ousing priorities 2ousing needs +upport for initiatives +ecurity of land tenure )ecognition of the informal sector self-help +ites and services +ettlement upgrading +ubsidies olerance for of land, s"uatter

housing, transport settlement 8rban management %apacity building #nstitutional strengthening 9ational housing banks *ublic-private partnership *articipation of civil society

1970 1990 1991 199< 8nced-1 ,3arth +ummit-

8rban 1anagement *rogramme :lobal +helter +trategy he urban 6gendas for the 1990s +tate withdrawal +tate as 4enabler/ 5 not 4provider/ 43nabling work/ housing markets to

+trengthening of markets +trengthening sector *rivate sector construction 9eighbourhood-based enterprises %ommunity-based action 2olistic frameworks 9ation-wide and city-wide strategies instead of pro!ect and neighbourhood focused intervention %ollaboration local between with multigovernments planning of financial

1990 2abitat-< ,%ity +ummit*overty )eduction +trategy

;ocal agenda <1 Habitat Agenda 2ousing rights =ecentralisation :ood local governance +ustainable urban development a. b. c. *overty reduction 8rban productivity 3nvironmental management

8rban governance 1etropolitan cooperation #ntegrated planning +trategic planning %apacity strengthening *articipatory planning *artnerships and networks 1icrofinance development municipal

central government #nstitutionalised stakeholders, multi-sector consutation mechanism Best practises <000 1illenium +ummit 1illenium ,1=:s4%ities &ithout +lums/ =evelopment :oals

4+caling upgrading/

up

of

slum service

9on-subsidised provision

<001 %ity +ummit 5 > <00< 8nced 5 < <00>

Urban Develo !ent and Lo"al Govern!ent Strateg# ;iveability :ood governance and

3nvironment, security, health

safety,

*erformance based urban management #mprovement of productive environment %ompetent and tranparent

#ntegrity of local government 3fficient factor markets ,land, capital, labour-

management

AGENDA SETTING 1illenium +ummit 5 >

CONCEPTS %ompetitiveness Bankability

STRATEGIC FOCUS 1unicipal finance

POLICIES AND PRACTICES management of municipal budgets *articipatory budgeting

+ource( ;indert, <000

+ome changes to the paradigm of urban development that resulted in policy changes greatly influence policy-making in #ndonesia as a developing country. %onsidering the urban problems that occurred in #ndonesia is not much different from other developing countries in the world, so some of the policies can be applied.

CHAPTER $. ANAL%SIS ?ne of the urban development policy that has been developed previously by &orld Bank aims to reduce the poverty rate. *overty has long been a ma!or issue in #ndonesia. a. Urban Develo !ent Poli"ie& in Indone&ia in order to Alleviate Urban Povert# 3

%ase study( 8rban *overty )eduction *rograms in #ndonesia ,*9*1 1andiri *erkotaan#ndonesia as one of the developing countries has high population growth rate. he pro!ection by B*+ shows that #ndonesia@s population over the ne$t twenty-five years continued to increase, from <0>.1 million in <000 to <7A.< million in <0<>. #ncreasing population growth triggers some urban problems, urban poverty in particular. )egardless of which poverty line is used, the absolute number of urban poor will continue to increase as the country urbani.es from its current level of B> percent urbani.ation to a pro!ected 70 percent by <0A0 and thus is an increasingly important target group in #ndonesia/s poverty reduction policies. he urban poor are concentrated in highly urbani.ed and densely populated Cava, accounting for more than two thirds of the country/s urban poor. )ates of urban poverty vary substantially across regions -- under 10D in Cava, higher in +umatera ,1<D-, and generally high in smaller and less urbani.ed 3astern regions, particularly 9 ,<BD, able 1-. =eclines in urban poverty have occurred since <00< in almost all regions.

+everal policies have been established as the solution of the problems which appear to reduce the high level of poverty due to the high rate of growth and economic disparities in the region. Before the reform era, all urban development policies are still using a top-down approach, but after the reform era which the system of government turned into a decentrali.ed, the government is considering a bottom-up approach and begin to develop a participatory planning. %hanges in the government system aims to ma$imi.e the effectiveness, efficiency, e"uity, and economy. &ith the regional autonomy, local governments are e$pected to improve the economic welfare of the people by improving the community so that there is no more poverty.

b. Ho' (rban develo !ent oli"# ba&ed on t)e e* erien"e o+ &o!e ot)er develo ing "o(ntrie& "an in+l(en"e t)e oli"# o+ (rban develo !ent in Indone&ia to alleviate (rban overt#. Based on the analysis of urban poverty and a review of main programs as well as recent studies carried out by the &orld Bank on urbani.ation and on social assistance, a number of policy priorities emerge for an urban poverty reduction strategy, particularly in view of the growing numbers of urban poor. hese can be categori.ed under < broad areas of( economic and urbani.ation policiesE and social policies and they are consistent with global evidence on poverty reduction strategies. 3$tensive global evidence has shown that any strategy aimed at sustained reductions in urban ,and national- poverty will rely on policies that foster strong economic growth, invest in human capital, ensure access to basic services, and provide social protection for vulnerable groups. #n most countries, urbani.ation has helped to foster economic growth and thus can play an important role in reducing urban poverty over the long-term. 6s #ndonesia urbani.es, proactively managing the urbani.ation process can further leverage growth and poverty reduction. *olicies that encourage efficient urban spatial structures, sustainable land use planning, investments in critical infrastructure, and the provision of basic services including for those in informal settlements will foster growth and ultimately contribute to poverty reduction. E"ono!i" and Urbani,ation Poli"ie& #mproving economic returns from urbani.ation 3nsuring Basic 8rban #nfrastructure for the *oorest and *reparing for 8rbani.ation #mproving 6ccess to %redit

So"ial Poli"ie&3$tending 6ccess to 3ducation and 2ealth for the 8rban *oor #mproving targeting efficiency and program redesign #nsuring 2ouseholds 6gainst #ncome +hortfalls he change of

*olicies issued by the &orld Bank in the field of economic, urbani.ation, and social are considered in accordance with the current condition of #ndonesia. government system is also considered to support the implementation of the policies. he influence of a system of decentrali.ation and regional autonomy to the implementation of policies related to urban poverty reduction is the implementation of good local governance as key factor for sustainable urban development in order to promote self-reliance and the ability to manage local economic development regions. #f 5

every region in #ndonesia has a good level of economic development the wealth distribution will occur and there will be no poverty. ". Urban develo !ent (rban overt#. #n line with the policies of the &orld Bank in addressing urban poverty alleviation particularly in #ndonesia, the #ndonesian government in cooperation with the &orld Bank to develop a poverty reduction program that is 8rban *overty )eduction *rogram for %ommunity 3mpowerment or F*rogram *erkotaan ,*9*1 1andiri *erkotaan-H. powerless become independent *enanggulangan Gemiskinan di *erkotaan his program is an e$ample of participatory through paradigm and attitude ,*<G*-H, now known as F*rogram 9asional *emberdayaan 1asyarakat 1andiri planning based on community. #ts goals are make the community who previously community transformation based on universal core valuesE develop a partnership and synergy between the community, government, local 9:?sI%B?s to access opportunity and resourcesE and enhance the community/s capability to develop sustainable neighbourhood "uality ,9eighbourhood =evelopment-1. he target of this programs is rogra! ')i") i& a lied in Indone&ia in order to alleviate

the low income community who lived in dense settlements or slum areas. Basically, *9*1 1andiri *erkotaan is community-based program which synergy with government plan. *9*1 1andiri *erkotaan facilitate the community and the local government to overcome poverty independently and sustainable through community agencies ,BG1based on three sustainable development principles ,Gonsep economy, and environment. #n addition to improving community self-reliance, local government capacity building is important in the implementation of effective regional autonomy. +ome of the things that became effective implementation of regional autonomy indicators namely poverty reduction, human resource development, fulfillment of basic rights, the growth of unemployment, infrastructure development, economic empowerment, and good governance. &ith the *9*1 1* program is e$pected to be the creation of regional autonomy that is more effective and increasing the welfare of society. d. Advantage& o+ t)e Povert# Red("tion Progra! he *9*1-8rban program ,*9*1 1*- operates in all urban areas of #ndonesia with the overall development ob!ectives of improving local level governance and service
1

ridaya-, i.e. social,

Gementerian *eker!aan 8mum, =irektorat Cenderal %ipta Garya, 1andiri *erkotaan.

,<01<-, *edoman *elaksanaan

*9*1

delivery. he ma!ority of resources are spent on small scale infrastructure improvements at the community level. he program, evaluated in depth in a companion policy note, #ndonesia, 3valuation of the 8rban %== *rogram, *9*1-8rban ,&orld Bank, <01<was found to be an effective approach for community participation and for addressing basic infrastructure at the community level. #ndependent assessments of in+ra&tr("t(re .(alit# &)o' it to be )ig)/ and "o!!(nit# organi,ation& are 'or0ing relativel# 'ell/ inde endent o+ Govern!ent er"eived to be rogra!& and &tr("t(re& . hese areas

6ccording to the &orld Bank evaluation, there are a number of areas where the program could be improved to further enhance efficiency and impact. include efforts to strengthen ro1e"t a"tivitie& +or &o"ial and e"ono!i" a"tivitie&

')i") !a# )ave a greater i! a"t on )o(&e)old 'el+are/ to en&(re !ore arti"i ation b# 'o!en and t)e oore&t in "o!!(nitie&/ +(rt)er "a a"it# b(ilding o+ +a"ilitator&/ i! rove!ent& to t)e 2anage!ent In+or!ation S#&te! 32IS4/ and !ore &#&te!ati" ro"e&&e&. e. Di&advantage& o+ t)e Povert# Red("tion Progra! he *9*1 1* which is also piloting a 9eighborhood =evelopment ,9=- program aims to promote more comprehensive urban upgrading by significantly increasing the si.e of the grant ,to 1 billion #=) per kelurahan- and introducing spatial planning and area prioriti.ation. 3arly indications from the limited implementation of this pilot suggest that in some communities the approach offers an innovative model for community driven urban upgrading based on spatial planning, however, there are currently a number of implementation challenges that could affect its scale up and need to be addressed. #n general, the pro!ect appears to be most successful in locations that have a strong BG1 ,independent BG1-, an engaged local government and generally do not have comple$ infrastructure needs<. In +a"t inde endent 562 & read over 117 di&tri"t& 8 "itie& in $9 rovin"e& )a& not rea")ed 1::; 3P$6P/ $:1$4. It ta0e& a long ti!e to a")ieve inde enden"e 562 in all region& in Indone&ia. Ever<in"rea&ing national debt d(e to in"rea&ing loan i& not &igni+i"ant 'it) t)e de&ired re&(lt& in e"ono!i" a& e"t. 6s the result of poverty reduction program, #ndonesia has demonstrated substantial gains in economic and social indicators over the past decade with gradual declines in urban poverty. =espite these impressive achievements, 1=; o+ t)e o (lation "ontin(e& to live in overt# 'it) anot)er >:; o+ all )o(&e)old& 1(&t above t)e
2

rogra! align!ent 'it) t)e lo"al govern!ent b(dgeting

overt# line and v(lnerable to +alling into

e!elop"en#,$and Po!er#% Alle!ia#ion

World Bank, 2012, Rapid Appraisal of PNPM Neighborhood Par#nership &ran# Me'hanis"()

overt#. #n cities, appro$imately 17D of the population are poor or near poor, representing some <0 million people. 6s the country urbani.es, this number is e$pected to increase, surpassing rural poverty by the year <0<0.

CHAPTER =. S%NTHESIS he growth of urban poverty in the metropolises and primate cities of developing countries has become main issue. %onsidering the urban problems in developing countries, world bank formulated some urban development policies to reduce poverty. #ndonesia which has high poverty rate, tried to implement policies to reduce poverty, especially in urban areas by referring the concept of the policy defined by the &orld Bank in 2abitat 6genda i.e. 2ousing rights, =ecentralisation, :ood local governance, and +ustainable urban development. +ome policiesIpractises in habitat agenda in order to reduce poverty, i.e.( J J J J 8rban governance 1etropolitan municipal cooperation #ntegrated development planning +trategic planning +

J J J J

%apacity strengthening *articipatory planning *artnerships and networks 1icrofinance 2owever, the policy should be applied in accordance with the conditions in #ndonesia.

*olicies that encourage efficient urban spatial structures, sustainable land use planning, investments in critical infrastructure, and the provision of basic services including for those in informal settlements will foster growth and ultimately contribute to poverty reduction. +o, policies issued by the &orld Bank in the field of economic, urbani.ation, and social are considered in accordance with the current condition of #ndonesia. #n order to address the high poverty rate in urban areas, the #ndonesian government in cooperation with &orld Bank developed a poverty reduction program known as *9*1 1andiri *erkotaan. he program is also emerged as a form of the influence of government system change ,decentrali.ation and regional autonomy- in order to promote self-reliance and the ability to manage local economic development regions. *9*1 program has several advantages, i.e. infrastructure "uality getting higher, and community organi.ations are perceived are working relatively well, and create the independent of :overnment programs and structures. 'urthermore, it has a greater impact on household welfare, ensure more participation by women and the poorest in communities, further capacity building of facilitators, improvements to the 1anagement #nformation +ystem ,1#+-, and more systematic program alignment with the local government budgeting processes. Besides the advantages, the program also has some disadvantages, i.e #n fact independent BG1 spread over 117 districts I cities in <9 provinces has not reached 100D, it takes a long time to achieve independence BG1 in all regions in #ndonesia, ever-increasing national debt due to increasing loan is not significant with the desired results in economic aspect, and 1AD of the population continues to live in poverty with another B0D of all households !ust above the poverty line and vulnerable to falling into poverty because there are still some program implementations are not effective.

CHAPTER >. CONCLUDING RE2AR6S 1. he outcomes of some &orld Bank programs were "uite "uestionable. he international urban development debate reflects the more general trends and changes in development paradigms. <. #n #ndonesia, the paradigm shift towards urban development policy is alos influenced by the system of government decentrali.ation and regional autonomy that encourages independence of a region in overcoming poverty. A. wo ma!or policies adopted to address poverty in #ndonesia are economic and urbani.ation policiesE and social policies with reference to some habitat policy agenda set by the &orld Bank. B. *9*1 1* program became one of the programs undertaken to address urban poverty through participatory planning based on community. #ts goals are make the community who previously powerless become independent community through paradigm and attitude transformation based on universal core valuesE develop a partnership and 10

synergy between the community, government, local 9:?sI%B?s to access opportunity and resourcesE and enhance the community/s capability to develop sustainable neighbourhood "uality ,9eighbourhood =evelopment-.

REFERENCES Gementerian *eker!aan 8mum, =irektorat Cenderal %ipta Garya. Pelaksanaan PNPM Mandiri Perkotaan. Cakarta. ;indert, *aul van ,3ds.-. ,<000-. Development Matters: Geographical Studies on Development Process and Policies. 8niversity. &orld Bank. ,<01A-. Policy Note - Indonesia: Ur an Poverty and Program !evie". Cakarta. &orld Bank. ,<01<-. !apid #ppraisal o$ PNPM Neigh orhood Development% &and Poverty #lleviation Partnership Grant Mechanism'. he 9etherlands( 'aculty of :eosciences, 8trecht ,<01<-. Pedoman

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