INDONESIA is the fourth-largest country in the world, with an area of almost 2 million square kilometers and more than 185 million inhabitants. More than 50 million Indonesians are classified as urban, a figure that is expected to increase to more than 70 million by 2000. It is estimated that in 1992 Indonesia had seven urban areas surpassing one million people and twenty-two other cities with populations in excess of 250,000 (Sensus penduduk 1990). Many Indonesian cities have been expanding very rapidly in recent years, with a few exceeding a growth rate of 6 percent annually. An important limitation in examining urban trends outside the largest cities is that only fifty-four urban places, a small minority of the total, have municipal status, which means that they are the only ones with official boundaries and population counts. Most population clusters, even some with more than 100,000 people, are still categorized as desas, or collections of villages, and lack local government. They are administered from the provincial or higher level of authority. In 1980, Indonesia had an estimated three hundred urban places with more than 20,000 people (Hamer, Steer, and Williams 1986). In other words, if anything, the degree of urbanization in Indonesia is underestimated. Indonesia is not a homogeneous country: diversity includes numerous cultural groups and a territory that is a vast archipelago. Its cities reflect this diversity. On Java and Sumatra urbanization dates back to the eighth century A.D., when Srivijaya, near present-day Palembang, was the center of a trading empire on the Strait of Malacca. For the next five centuries, various inland sacred or palace Hindu-Buddhist cities dominated the islands that constitute Indonesia (Reed 1976). Mataram, Kediri, Borobudur, and, more recently, Jogjakarta and Solo are examples of the once Indianized, but now Islamic, cosmic cities on Java alone. Traditional, religious-inspired urban form still characterizes a few settlements, most notably the sultan's capital of Jogjakarta, and this form is also a feature of some coastal trading cities that are now common throughout the urban hierarchy. Most of the large coastal cities are provincial capitals. Given the far-flung and disconnected physical geography of Indonesia, the role of regional centers is especially important, from Medan in North Sumatra to Manado in North Sulawesi. The central government has long been caught in a dilemma over the role of these disparate capitals. On the one hand, the most efficient way to control an effective national territory in a new and somewhat arbitrarily defined country is to create a system of dynamic, reasonably autonomous cities. They would provide the needed infrastructure to help spread the fruits of economic development throughout the country and would minimize the core-periphery problem of hypergrowth in Jakarta, the national capital. On the other hand, Indonesia has long been reluctant to encourage too much regional autonomy because of troublesome secessionist movements, especially in the country's remote extremities (Drake 1989). The central government carefully controls linkages such as international air routes and trade patterns, although in recent years this grip has loosened to the benefit of regional cities. There are many pros and cons in the development of strong regional capitals, and ideological positions play an important role. In recent years, the central government has strongly favored more regional autonomy and economic equality, so numerous smaller cities are growing. The number of complicated governmental regulations that encourage, or even require, industries to locate at or near Jakarta in order to interact with decision makers has been reduced. Financing procedures have been deregulated and liberalized, and banking has become nearly ubiquitous because foreign banks are now free to open branches in cities other than Jakarta. As a result, many regional centers are now expanding more rapidly than is the capital. …
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