Cities in Transition: Urban Sector Review in an Era of Decentralization in Indonesia (Working paper no.7)

Rapid urbanization is straining Indonesia's cities: it is the urban poor who suffer most. Urban services are inadequate to absorb the continuous flow of people into the cities, which were neglected for years and which took a blow in the aftermath of the crisis. Decentralization is providing an opportunity as well as a threat for improving urban services. The policy could enable city managers to tackle issues affecting their citizens, but at the same time, its hasty implementation and incomplete framework could strain cities even further in the short run. For cities to be able to face the challenges of the present and the potential of the future, the central government must complete the unfinished agenda of decentralization that will enable local governments to fully assume their new responsibilities, while the cities must strive to meet rising local aspirations by improving urban services, reducing urban poverty and promoting local economic development.

Table of Contents:
 
Foreword
Acknowledgements
Preface
Executive Summary
 
Chapter I: The Setting for Change
Background
Recent Developments
Decentralization: The “Big Bang”
 
Chapter II: Decentralization and Local Governance
Introduction
Decentralization: The Policy and Regulatory Framework
Institutional Framework Governing Urban Affairs
Local Government Financing
Changing the Face of Urban Local Governance
 
Chapter III: Urbanization: Rising Pressures, Uncertain Responses
Addressing Urban Poverty in Indonesia
Urban Land and Housing
Provision of Urban Services
Local Economic Development
Urban Environmental Issues
 
Chapter IV: Review of Urban Sector Operations
Overview of Past Development Assistance
The Story of Two Programs
Overall Lessons Learned
A New Paradigm of Urban Lending: UPP and USDRP
 
Chapter V: Frameworks for Sustainable Urban Growth in Indonesia
Government of Indonesia's Urban Development Policy
Guiding Principles and Approach
Response to the Challenge: Further Change in Cities
 
Outlook: Cautious Optimism