Sunday, July 30, 2006

Optimism for Pekalongan and Solo

I don’t get to visit Mayors often, but last week was a special week, so we visited two. And what excitement and optimism did they bring me!

Our visit to the Mayor of Pekalongan (a city of 270,000 people on the northern shore of Central Java) was triggered by his commitment to improve sub-standard housing (‘slums’). Mayor Moh. Basyir Ahmad, who previously worked as a medical doctor, found that many health problems are caused by unhealthy living conditions. So this year Pekalongan has started programs to upgrade 250 houses. Next year it will be 850 houses, and the following year 1,500. He said specifically to us: “We need knowledge, not funds.”

Pekalongan is well known for its home-based fine Batik industry. (pic source here)

Nothing special there yet. But it’s encouraging that Mr. Basyir cited the Human Development Index (HDI) as a major factor in designing his programmes. The head (Bupati) of Jembrana district in Bali is also leading pro-poor programmes based on HDI, and Jembrana’s success is now promoted all over the country. [See a handbook on 'how to be like Jembrana', also read reviews here and here]

Our visit to the second city, Solo (officially known as Surakarta – in the centre of Central Java), is no less encouraging. Mr. Jokowi, who’s left his furniture export business to become Mayor, was with us for almost the whole day, as he took us around the city to show how he dealt with the informal traders ‘issue.’

Solo is often considered the source of 'finer' Javanese culture. They have a wayang puppet-mastering depertment (Jurusan Pedalangan) in STSI - Surakarta Art Institute.

Just 5 days before our visit, 1,000 informal traders conduct business on the public parks around Banjarsari Monument. Now they’ve all moved to a newly built Notoharjo ‘klithikan’ market in an area called Semanggi, which is still located in the business area of the city. The Mayor spent the last 9 months negotiating with traders associations, and came out with a deal like this: each trader would get a lot in the market, and he/she would have it free of rent and taxes for the upcoming 6 months. Each would also receive 5 million rupiahs (~500 USD) of soft loan as business capital. The Mayor expected that the new market will have return of investment in 8-9 years. After traders moved to the new market just 4 days before, we saw that the market is already bustling. Now that the monument is back on public hands, the Mayor is refurbishing the old monument for the upcoming Independence Day celebration in mid August. [read reviews from Kompas and Jawa Pos]

Maybe we should encourage more medical doctors (the Bupati of Jembrana is also one!) and entrepreneurs to be Mayors? :) Or what about Faisal Basri as Governor of Jakarta?

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Problems with Low-income Housing Mortgage

Last week we went to three banks, BRI, BTN, and Bukopin, to see the possibility of them providing finance for low-income housing. BRI has heavy emphasis on financing small and micro businesses, BTN on housing/property mortgages, and Bukopin on cooperatives.

Here are several issues discussed:

  1. A bank complained that the government doesn’t have vision on how we should deal comprehensively with the problem of low-income housing needs, while many local governments are only interested in projects from which they can take advantage.
  2. They also said it may be interested in financing such projects if the government provides two things: legal land titles (new, large quantities of subdivided land), with basic infrastructure (the most important being roads, electricity, and water)
  3. Another bank raised the issue of insurance/guarantee funds and control over subletting.
  4. They said they can provide financing for corporation/enterprise’s workers housing, and for ‘solid cooperatives’ (which they need assess first).
  5. Another bank complained about the lack of legal enforcement for those who default. They said that there have been too many cases where if someone is allowed to stop payment, then others will join.

My conclusion so far is that there is a possibility of mobilizing commercial banks to play a role in upgrading and preventing slums. However, the government will need to play an important role in providing the right incentives (not everything can be privatized, of course!). Also, there needs to be better management: both for the community institutions/cooperatives who apply for housing loans, and for the people who manage and maintain such developments.

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Problems with Supply-driven Low-income Flats

The organization for which I’m currently consulting believes that low-income housing development should be in the private domain. It’s how things are done normally. The government can provide public housings, but to what extent? And what have been the outcomes of such housing built and managed by the government?

Karet Tengsin flats in Central Jakarta. You can see the pointy BNI Tower faintly in the background.

Penjaringan flats in North Jakarta, by the industrial/warehouses. Some have dubbed this a 'vertical slum.'

Let’s look at a couple of low-income flats built and managed by the Jakarta municipality: one in Karet Tengsin, Central Jakarta, and the other in Penjaringan, North Jakarta. In both cases there’s a significant subsidy from the municipality: only one-third of flat costs are to be paid by residents (12 out of 36 million Rupiahs in 10 years – which is dirt cheap). However, a swooping 60% of them have stopped repayment. The rent price still refers to the 1988 Governor’s decree (1,200 to 7,200 Rupiahs – 13 cents to 80 cents – a day!), but residents have constantly protested (demonstrated) every time there’s a plan to increase rents. They also don’t pay utility bills. And worse, the intended target group does not live there anymore; they’ve sublet the flats to those better off, for money of course. And now the flats have somewhat turned into ‘vertical slums.’

Out of frustration, the municipality owned company P.D. Pembangunan Sarana Jaya will return management rights of some of the flats to the municipality (Dinas Perumahan).

Does the main problem lie in management, or in the concept of social housing in the first place? The Jakarta municipality is planning to extend the flats in Karet Tengsin (actually this has recently started) and redevelop those in Penjaringan. For the latter case, costs are estimated between 48 and 64 million USD (depending on the alternative designs). However, the municipality only has 20 million. So how can they effectively serve the increasing housing needs of low-income households inside the city?

Using the approach I mentioned at the beginning, one way to deal with the problem is mobilizing domestic capital (funds from the residents, community groups, and domestic commercial banks) to finance low-income housing development. As has been well documented, the poor actually has money to pay (for example, those living in slums pay more for water than their richer counterparts living in formal areas of the city). Not only that, in many cases the poor are more prudent in repaying loans (for example, see the performance of micro credits).

So why can’t we mobilize these funds (especially banks) to provide financing for such activities? Answer in following post.

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Monday, July 24, 2006

Endogenous and Genuine Development

It was such a thrill for me to finally see and listen to John Friedmann in person deliver a speech last month. The urban planning guru received the 2006 UN-HABITAT Award and gave the jam-packed inaugural UN-HABITAT lecture at the World Urban Forum in Vancouver. Having read some of his books (Planning in the Public Domain comes first to mind) passionately, and studied at the department that he founded and chaired for 14 years, I was so eager to hear what he has to say for today’s context.

Friedmann’s speech, titled The Wealth of Cities: Towards an assets-based development of urbanizing regions, was the ultimate progressive’s answer as to how cities should (choose to) develop amidst all the pressure “to make themselves into commodities for the capital market” and “to frustrate themselves to the power of global capital.” He said all this is useless as “when capital finds more attractive regions, they will leave the city, leaving abandoned factories…” Friedmann therefore argued for “endogenous, genuine development.”

And how should endogenous growth be done? Friedmann provided 7 clusters of regional assets into which local governments must invest:

  1. Human assets: encompassing those that support a person’s right to live: housing, education, health
  2. Social assets: civil society – or the bonds that tie people together, be it via religion, sport, music, hobby, what have you.
  3. Cultural assets: includes physical heritage such as buildings and places, but also those of “everyday life vibrancy,” including popular traditions and festive occasions.
  4. Intellectual & creative assets: intellectuality and creativity must be nurtured; there has to be “a freedom to create;” “creativity can’t be commanded, but creative work must have public support.”
  5. Natural assets: including forests, rivers, and the urban fringe. The city needs them as they are part of the urban as well (Friedmann’s words were “where does the city end and the countryside begin?”)
  6. Environmental assets: conditions/things that make living in the city bearable physically, such quality of water, air, space.
  7. Urban infrastructure assets: including urban transportation and utilities. The question is whether to invest in infrastructures of the rich minority (the 15% automobile class) or the poor(er) majority (the 80% transit and walking class). [note: I’m not sure to which city Friedmann was referencing these numbers, but you get the point]

After all these years, Friedmann is still the progressive planner. I can totally relate to his current ideas through his old writings. His argument slaps the faces of cities competing with each other to host the Olympics and attract foreign investments. The assets are not "out there" to compete for, but within a city/region all along…

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Friday, July 14, 2006

Less Life Space, More Economic Space

Jakarta's new spatial planning blueprint will provide more "prospective economic areas" and less green and open space. The blueprint has attracted criticisms from independent urban planning experts.

Already losing its citizens to the suburbs, Jakarta still needs to learn that life in the city is not all about economic activities. Even if we put the economy high up on the priority scale, such activities depend on opportunities for recreation. Furthermore, much of Jakarta's economy depends on the informal sector: the low-income folks who privide lunch for the city's middle class everyday. These people and activities need space in order to play the important role of supporting the city's economy.

Bianpoen said, "The city plan lacks social justice as it continuously evicts the poor to make way for the rich elite." I'd say, the government lacks vision as evicting the poor will eventually mean suicide for the rich elite.

PS: The title is inspired from John Friedmann's book, Life Space and Economic Space. I'll write more about the urban planning guru later.

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Friday, July 07, 2006

"Trade on Human Terms"

UNDP admits that "free trade will not embrace the poor unless countries pursue a bold new policy agenda harnessing economic growth to
promote human development."

To deal with this issue, eight recommendations are then given:
1. Invest in competitiveness
2. Adopt strategic trade policies
3. Restore a focus on agriculture
4. Combat jobless growth
5. Prepare a new tax regime
6. Maintain Stable Exchange Rates
7. Persist with Multi-lateralism
8. Cooperate with Neighbors.

The UNDP Asia-Pacific Regional Human Development Report 2006 is titled "Trade on Human Terms" and can be downloaded from here.

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Philippine community radio burnt down

AMARC deplores the burning down of Community Radio Station dwRC 90.1 FM Radyo Cagayano in the Philippines

Kathmandu, July 6, 2006 The World Association of Community Radio Broadcasters (AMARC) condemns the burning down of Radio Cagayano dwRC 90.1 FM in the Cagayan province of the Philippines. Speaking at a press conference in Quezon City, Ms. Bianca Miglioretto, Vice President of the Women’s International Network and Board Member AMARC Asia Pacific expressed grave concern over the incident. “Community radio is one way of giving a voice to the voiceless. If this voice is taken away by burning the people’s community radio station, it is a grave violation of their right to communicate,” she said. “We will start a campaign of protest to pressure the Philippine government to give justice to the people of Radyo Cagayano,” she added.

On July 2, 2006 about 2 o’clock in the morning eight men wearing ski-masks and armed burnt down the radio station using gasoline (petrol) in big bottled water containers which they poured over the equipment and the structure before setting it afire. The arsonists, some of them wearing combat boots, military type fatigues and divers’ watch often used by the Philippine military were also armed with M-16 armalite assault rifles and 45 caliber handguns. They used ropes to hogtie the victims and articles of clothing to gag them. The radio station employees suspect the perpetrators to be members of the 17th Infantry Battalion of the 5th Infantry Division of the Philippine Army. The 17th IB is headquartered near the incident site with the 5th ID is station at Gamu, Isabela Province.

The building was totally razed to the ground, including all the pieces of equipment therein. The black draft created by the flames also severely injured Joy Marcos, a staff of the station, on his face, and Arlyn Arella and Armalyn Baddua, also staffs of the station, on their feet and legs. Another staff Richard Ayudad was bruised on his neck where the perpetrators poked it with a handgun. The arsonists also took all of their mobile phone units.

The incidents of attack over free media in the Philippines have grown dramatically over the past few years, especially since Gloria Macapagal Arroyo became President in February 2001. Since then 42 journalists have been murdered, which amounts to 80 the number of journalists killed after the fall of dictator Ferdinand Marcos (1986). AMARC calls upon the President and the Government of the Philippines to put an end over the oppression of freedom of expression in that country with immediate effect. AMARC also calls upon the government of the Philippines to reimburse the losses suffered by Radio Cagayano due to the attack and bring to justice the arsonists.

For more information, please go to or contact: Suman Basnet, Regional Coordinator AMARC Asia Pacific, Kathmandu, Nepal. Email:

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Wednesday, July 05, 2006

On the lookout for "Second Cities"

Newsweek International Edition has a special report on the world's most recent urban trends, titled the World's 10 Hottest Cities. The report puts the current buzz of "more than half of the world's population live in urban areas" into more solid & balanced context .

The report's introduction, Unlikely Boomtowns, argues that the biggest waves of people will no longer be moving towards the world's biggest cities (New York, Tokyo, Mexico City, etc), but to "second cities." It is THESE dynamic "second cities" which will be "hot" in the coming years: Fukuoka, Toulouse, Ghaziabad, Nanchang, etc. So be on the lookout for them.

Another interesting article says that even birds, animals, and plants are moving into cities! With the current rate of deforestation, pesticide usage, and monoculture, more squirrels are to be found per kilometer square in urban areas than in rural areas.

In another article, Richard Florida, author of The Rise of the Creative Class and The Flight of the Creative Class, reminds us that it's not cities, nor nations, that are growing, but rather urban corridors - or regions.

The special report features a score of other interesting articles.

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Tuesday, July 04, 2006

Less race, more class (a 4th of July post)

Marcellus Andrews says that African Americans' economic plight is less caused by racism, and more by modern-capitalism. And in capitalism, "poor men of all colors and conditions are economically disposable."

For Andrews, Blacks face a tough condition because:
the end of the American segregation system a half century ago put black people onto the blue-collar road to the middle class just when the on-ramp shut down. In the mid-1970s, the country de-industrialized. American companies off-shored steel, stopped building ships and, gradually, autos too.
OK, this is a bit exaggerating. But the point is: at that time there was not as much need for cheap, unskilled labor as before. The whites have already passed through the blue-collar road and became the middle class. The blacks are left in the hole.
Children from modest circumstance faced either low-wage work or no work at all. Just look at the fate of poorly educated immigrants today. Their influx is simply changing the color of surplus males from black to brown. The sad fact remains that America doesn't seen to care about giving these people the tools and fighting chance to help themselves.
Happy 4th of July, United States of America!

Ode to Times Square and people's right to the city

Marshall Berman, a Marxist-humanist and urbanism professor, has a new book that celebrates One Hundred Years of Spectacle in Times Square. Dissent has a good essay which is excerpted and adapted from the book here.

The essay, while entertaining and insightful, is quite long. What interests me most is the last part (scroll down to the section titled Epilogue: Reuters and Me), where Berman got thrown off the sidewalk in front of the Reuters building in Times Square, probably because he didn't look appropriate. Here're some of his thoughts:
What has made Times Square special for a century is that, to a remarkable extent, it really did belong to everybody. It enveloped the whole world in its spectacle of bright lights; it gave everybody a thrill; it was a trip where the whole world could cruise. ... the people look great, the lights look great; so I let it be, until the day one of these global corporations touched me, and told me I wasn’t allowed to stand on the street on Forty-Second Street and Broadway.

Where did these guys get the idea that they own the street? How many more of the Square’s new corporate giants share this belief? And how did they get it? ...

As I close, there are two big ideas to sign. The first big idea, which goes back to the start of the Enlightenment, is that the right to the city is a basic human right. The second, flowing from the first, is the right to be part of the city spectacle. This spectacle is as old, and as modern, as the city itself.

Pic of Reuters building in Times Square was taken from

Happiness, part 3 (now sex is in the picture!)

Apparently happiness is a hot topic these days!

Today's LA Times says that increasing sex from once a month, to once a week, is equivalent to $50,000 annual salary increase.

(tip via IM discussion with my shinyuu, Yoh)

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Monday, July 03, 2006

What's with our hype about Arabian tourists?

Indonesia is expecting a two-fold increase of Arabian tourists. Why? I'm not so sure. But one thing certain: this hype has attracted our Vice President to make a "sensitive" remark about Indonesia's informal sex industry, although he clarified it here.

A couple of months back, an UGM economics professor delived a speech in Jakarta about how to lure Arabian tourists into the country. Although the rationale given by the organizer seemed pretty clear: Indonesia is a "Muslim" country, and there are a lot of "Islamic" historic sites which should be interesting for muslim tourists, such as Sunan Kalijaga's tomb and what not, the professor is not convinced.

In the airport, where we met, he said:
1) "To Arabs, Indonesians are their domestics, their housekeepers. I, for one, would not be interested in visiting my housekeeper's village out in the countryside..."
2) "What's more interesting for many Arabian tourists is the sex and gambling industry, and Indonesia is not very attractive in that sense."

Sex and gambling seem to be more interesting to many tourists than religious sites. And it seems that our VP understands this pretty well. However, being "Indonesian", he'll have to be more careful about remarks he makes in public.

Sunday, July 02, 2006

Another cash-handout unrest

Late last week, due to unfair distribution of "living cost," hundreds of people in post-earthquake Jogja area raged and damaged a kecamatan office in Sleman.

It seems to me that our government REFUSES to learn. They keep using the seemingly politically-smart cash hand-out strategy (which since the late 1990s have taken several names, ranging from Jaring Pengaman Sosial, Bantuan Langsung Tunai, "Jatah Hidup", and now "Living Cost"), but always bumping into social unrest.

Education as scam

Roem Topatimasang said that school is opium (Sekolah itu Candu). John Taylor Gatto, however, brings it up a notch by arguing that the whole US education system is a scam, "designed to keep us uneducated and docile," and "remains unchanged to this day."

Here are some quotes from those who designed such system in the late 19800s and early 1900s:
We believe that education is one of the principal causes of discontent of late years manifesting itself among the laboring classes. (The Senate Committee on Education, 1888)

Every teacher should realize he is a social servant set apart for the maintenance of the proper social order and the securing of the right social growth. (John Dewey, 1897)

[schools should be factories]... "in which raw products, children, are to be shaped and formed into finished products...manufactured like nails, and the specifications for manufacturing will come from government and industry." (Elwood Cubberly—the future Dean of Education at Stanford, 1905)

In our dreams...people yield themselves with perfect docility to our molding hands... (Rockefeller Education Board—which funded the creation of numerous public schools, 1906).
The book is freely downloadable from here.

Saturday, July 01, 2006

Happiness, again

I'm not quite done with happiness. And, apparently, neither have 900 Harvard students who attend Tal Ben-Shahar's class twice a week to learn "how to get happy." The class, Psychology 1504, or Positive Psychology, seemed to have become the most popular course on campus.
The course focuses on the psychological aspects of a fulfilling and flourishing life. Topics include happiness, self-esteem, empathy, friendship, love, achievement, creativity, music, spirituality, and humor.
And don't forget to click that first link to get Six Tips for Happiness a la Ben-Shahar.

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Of happiness and/or wealth

Here's another reason to support my thesis that happiness and income-level/wealth does NOT necessarily go together.
Economist Alan Krueger and psychologist and Nobel laureate in economics Daniel Kahneman have found, using a newly developed analytical technique, that people with above-average incomes do not necessarily spend more time doing things they enjoy.
And what do they enjoy?
People, regardless of their income, are happier when they're socializing than when they're doing work around the house. They're happier when they're doing active leisure-type activities than when they're watching TV.
This may correlate to the condition that high income-earners face: they have to work longer hours than their lower-income counterparts.

During most of the 1900s, the hours of work declined for most American men. But around 1970, the share of employed men regularly working more than 50 hours per week began to increase...

This shift was especially pronounced among highly educated, high-wage, salaried, and older men. For college-educated men, the proportion working 50 hours or more climbed from 22.2 percent to 30.5 percent in these two decades.
Ouch, I'd say.

Guess that's why Bhutan's King Jigme Singye Wangchuck in 1972 created the term Gross National Happiness. Here's a link to a set of papers related to GNH from the Center for Bhutan Studies. There's also a project that promotes Gross International Happiness.

Now, wouldn't you wanna be one of the happy ones? :)

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Loyal, smart, or honest

It seems that India is in more than one way similar to Indonesia. Take this post from India Uncut, for example:
I find from the Times of India that the chief minister of Bihar gets a basic salary of Rs 2000 per month -- less than that of a government peon -- though with perks it goes up to around Rs 25,000. You combine that relatively low salary with immense power and discretion -- and therefore opportunities to be corrupt -- and it's virtually a guarantee that the field of politics will attract either losers or thugs. And obviously the thugs will beat the losers.

Back in Indonesia, we have an anecdote that goes: "A government worker can have either two of these three qualities: loyal, smart, OR honest. One cannot have all three."

Of course, this does not apply to all.