JAKARTA, KalderaNews.com – Urbanization has the potential to be a major driver of prosperity and inclusiveness in Indonesia, but fully realizing this potential requires bold institutional reforms, according to a World Bank report launched today. Indonesian cities need improved management and more adequate financing.
This translates into expanding options for financing infrastructure and basic services, improving coordination among different levels and sectors of government and within metropolitan areas, and building capacity in local governments to better plan and implement urban development.
Indonesia has urbanized as it has climbed the ladder of development. Since 1950, average GDP per capita has increased almost nine-fold. At the same time, the share of the population living in urban areas has increased from 12 to 56%. Indonesia’s prosperity gains are closely linked to the benefits from urban agglomeration and the transition to an economy based on services and industry.
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“As people and firms cluster in cities, it becomes easier to match talent to jobs, exchange ideas and knowledge, share inputs, and access markets,” said Kurt Kunz, Swiss Ambassador to Indonesia. “Cities are engines of prosperity, and this is why Switzerland supports sustainable urban development in Indonesia,” he added.
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