ESAI / HALUAN
The Ominous Omnibus
How Indonesia’s Omnibus on Job Creation influences the urban process
The Capital City and Omnistate
The urban is often seen as a site of contestation when trying to make sense of its “fast-changing contemporary socio-spatial reality”. As governments of big cities race towards ideals ironically embroidered with labels of smart, modern, inclusive and sustainable, ideals of modern infrastructure further shape a homogeneous urban landscape.
That being the case, the establishment of high-rise commercial and residential enclaves, thematic parks, as well as designated formal areas for the relocation of informal street vendors, have become the cornerstone of modern-day cities such as Jakarta, Bandung, Surabaya, and other cities alike. Often coinciding with increased tension between government and its people, these pursuits of the modern Indonesian city implies how urban development may be regarded as a linear process and somewhat of a competition to pursue; as if there is a universal, one-size-fits-all conception of the Indonesian urban modernity.
Taking a step back, such a fast-changing reality may well attribute to Schumpeter’s notion of creative destruction — the expansive yet destructive nature of capital and innovation. Echoing Marx, capital and innovation are set within a constant motion and a controversial tendency to dispossess and over-accumulate. Harvey (1978) adds to this by arguing how the capitalistic process embraces the production and reproduction of space in order for it to sustain.
Much of urban literature tries to examine issues regarding urbanisation and social-economic dislocations. Within the capitalist conception, the urban process under capitalism serves as a battleground for the tendency of domination of labour by capital through the means of privatisation and financialisation of the public sphere. Capital accumulation within the urban thus exposes spaces of dispossession and contestation of class struggle bound in a social, political, and geographical expression of the production of urban space.
In the process of production and reproduction of capital, the role of the state in the capitalist context has been an integral part of enabling the process of accumulation (Khan & Karak, 2019). Instances of state-directed redistribution of investment, manipulation of interest rates, and at times militarization in the suppression of labour unrest, have culminated in violent class power and a neoliberal developmental narrative. In turn, the creation of an ominous state whereby social relations are hierarchically determined based on an all-encompassing, centralist paradigm, often including collusion with private entities to ‘spur economic transformation’ (Sato, 2019; Doner et al., 2015).
Media coverage and online debates have conspicuously raised the issue of the lack of labour force protection, potential environmental degradation, and impairment of local autonomy, to name a few, as the major fallacies behind the omnibus Job Creation Bill or UU Cipta Kerja. Not to mention the strong sentiment on the lack, or if any, democratic and transparent legislative process of the controversial bill.
Needless to say, growing out of the urban-rural dichotomy, the created capital space and its process of being, as manifested in Indonesia’s omnibus law on job creation, have also been on the agenda of critical urban studies and have been of many interests to geographers and planners alike. On a less salient note, however, the intended capital space created through Indonesia’s job creation bill as well as its process of being, the role of the state in a new spatial planning era and the urban socio-spatial implications remain a critical yet unexplored perspective within the bill’s discourse.
In essence, this editorial hopes to bring light a broader perspective of the urban process in present-day Indonesia. The urban process with UUCK may signify the increasingly streamlined, centralising and arguably homogenising environment for investment-oriented urban development as people become numbers aggregated in the workforce, seemingly dispensable in the state’s race to the bottom pursuit to manifest Indonesia 2045.
It may be too late to substantively change UUCK and its derivatives, but that’s not what this editorial is all about. Rather, what we pursue to be more important is uncovering the underlying development narrative — how capital accumulation changes space within a process that is continuous and expansive, regardless of the UUCK or its derivatives’ legal verification. Hence we position the discussion of the UUCK as part of Indonesia’s developmental trajectory, serving as only one of many manifestations of the major forces that catalyse the urban capitalist process.
Urgency, process, and creation of new urban conception
The reelection of the Jokowi administration in 2019, to the surprise of many, symbolises a new developmentalist era for Indonesia. Advancing from Jokowi’s infrastructure-oriented development in his first term, the reelection serves as a momentum to enhance Indonesia’s human capital and labour force to spearhead the country’s significance in the global economy.
Introduced in Jokowi’s reelection speech, among the most prominent policies introduced in Jokowi’s second term include his ambition to enhance Indonesia’s industrial productivity with the job creation bill. Three core issues underline the government’s proclaimed urgency behind the job creation bill conception, namely Indonesia’s poor regulatory quality, low investments, and inadequate job absorption rates. Despite Indonesia’s history of poor legislative performance, the omnibus law took only a year to be deliberated and actuated into a fully-fledged bill.
Jokowi’s premise for the bill’s urgency is as follows. The increasingly likely chance that Indonesia’s economy will remain stagnant, if not contract, in the middle-income trap within an ever globalised global economy, may force Indonesia to lag behind its rivaling emerging countries such as Vietnam.
Coupled with the devastating impact of the COVID-19 pandemic on social welfare and the economy, the government sees the momentum to introduce the omnibus law on job creation as a panacea to Indonesia’s looming economic downfalls.
A closer look into the urgency of the bill, however, may point out inconsistencies that contradict and question the government’s claims.
First, resting Indonesia’s industrial policy merely on claims of Indonesia’s low EoDB index shows may prove inadequate to capture the real issues gnawing Indonesia’s economy — rent-seeking behaviour and weak corruption eradication efforts. Such formal standardisation of a developing country’s economy shows the weight and blindness of global economic hegemony of which emerging country’s may inherently fall short upon.
Second, should such hegemonic economic standards be considered, holding into account complex licensing and permit regulations alone still become simplistic and non-exhaustive to Indonesia’s long list of issues of law enforcement? Corrupt law enforcement thus points to a myriad of informal institutions more significant in influencing law and business uncertainty. Thus, as if sweeping such institutions under the carpet, the validity of the bill’s urgency becomes questionable whether it may or may not be the appropriate panacea to lift Indonesia from its middle-income trap.
Yet the developmental narrative underlying all the article controversies remain unexplored:
- whether Jokowi’s arguably authoritarian neoliberal developmental narrative of production and reproduction translates as a valid, ethical, and economically viable solution,
- how the omnibus law as a strong force of capital fixates and changes the spatial processes of accumulation, manifested in how our cities take shape, and
- granted such urgencies as proclaimed by the government exists, whether social, environmental, and political trade-offs may be well internalised in our newly reconceptualised urban spaces or perhaps such urgencies may require other measures than those offered by the job creation omnibus law.
Discourses on a new urban normality
Stretching the issue beyond its controversial urgency, many have advocated and protested the job creation bill on its undemocratic, conflict-ridden, and even hasty legislative process. A handful of others, to their own confusion, have compared and contrasted the bill’s substance on important topics such as labour and environmental protection with previous related laws, only for the omnibus law to have 4 revised drafts after its passing through DPR. The capital intensive and centralistic development normality of what is to come, as oppositional sentiment suggests, underscores also how the urban process takes shape.
It may be acknowledged that the performance of local governments to engage with and produce planning outcomes may tend to be inefficient, slow and lack sufficient resources, thus hindering investment vis a vis growth, as the central government claims.
However, does the lack of local development and local government shortcomings point to an issue of regional autonomy or complex bureaucracy per se, or are there even rooted issues to address such as minimal state budget, high fiscal transfer dependency, and lack of quality human resources? When planning products are accelerated by allowing central state intervention and approval for local spatial planning regulations, particularly in cases where the local spatial planning products are yet to exist, it begs the question of whether such recentralisation allows for more publicly aligned spatial planning amidst a heterogenous urban planning context; would the simplification of spatial planning add to its efficiency or susceptibility to abuse?
Inclusive public participation sustained throughout the planning process as well as strong institutions to reinforce development planning control in accordance to public interests may be critical towards mainstreaming change in Indonesia’s increasingly centralized planning process.
Concerns have surfaced regarding problematic rights to work and rights at work, criticizing promises of job opportunity increases but with less stability and a higher dispensability of labour. In particular, when juxtaposed upon a broader developmental narrative of the government’s 2045 vision, capital penetration towards a dispensable workforce may inevitably cause skill mismatch and an increasingly precarious society.
The political willingness and effective public policy communication to enforce environmental monitoring and evaluation above economic growth manifest another urgent matter. If anything, the significance of environmental regulation and documents may be as necessary as ever under the new urban development normality. In ameliorating the complex fabric of natural resource dependence, extractive urban-rural linkages, and vicious land grabs, documents such as AMDAL and KLHS become the forefront for post-ante environmental regulation evaluation. Whether UUCK implies a loosened stance towards environmental conservation may be questioned, but the heightened climate emergency may nonetheless require the omnibus and its environmental regulation derivatives to engage in strong public policy communication.
Under this coming normality, such urban processes may be revolutionary but not one without revolt. The discourse regarding the urban process then grows, on the one hand, to instill reforms on becoming more capital intensive and move up the development ladder, and on the other hand, bring voice to those dispossessed in the process. In relation to Indonesia’s urban context, digital penetration has become a prominent attribute in sparking these new social movements, similar to the Idle No More movement, contrary to claims of ‘civic vacuum’.
A clearer future?
In retrospect to the period that this editorial was written, the UUCK legislation continued to roll out omnibus derivative regulations, as promised within 3 months of the omnibus’s validation back in November 2020. Per 21 February 2021, 49 laws have been published, among them 45 Government Regulations and 4 Presidential Regulations.
Consequently, discourse on the scope of matter becomes more concrete in many aspects. Among them include derivative regulations on spatial planning, environmental protection, labour rights, and so on, outlining in much depth the hows that have been of much debate and speculation. Needless to say, such advancements only further clarify the significance of capital upon space and the process of urbanisation.
For instance, the PP Penyelenggaraan Penataan Ruang, explicitly focuses on accelerating ease of investment and sustainable development of space. Substantially, Agora’s investigation of the PP stresses three major changes to Indonesian spatial planning, 1) the erasure of zoning regulations and licensing provisions, 2) the simplification of spatial planning products, in particular, those related to local and provincial strategic areas, and 3) unclear provision of local spatial planning implementation.
In addition, the PP also stipulates the alignment of land use activities and investment permits, map regulations, and the digitalisation of spatial planning as a means of achieving transparency and more community-oriented spatial planning products. With UUCK, efficiency in spatial planning may thus be achieved through its own simplification and recentralisation to ensure that planning regulations do not get in the way of investment.
Repoliticizing the urban process in post-UUCK Indonesia
Pressing urban issues such as informality, precarity, dehumanising workforce regulation, lack of political will and adequate political communication to prioritise and enforce environmental protection, and the depoliticization of social movements, as well as urban land grabs in the name of public development has persisted even before UUCK.
Yet will an omnibus on job creation that rests upon notions of sluggish investment rates, overlapping regulations that hinder investment vis a vis development, and the ambition to capture footloose globalised industries as a vehicle to graduate from the middle-income trap be a sufficient, appropriate and, more importantly, just means to ameliorate the heterogeneous externalities of current urban processes? Or are some urban processes, solutions, and groups of people still overlooked in pursuit of development?
Ultimately, understanding UUCK rests on understanding the underlying narrative of accelerated urban transformation and continuous reproduction of capital in Indonesia. In its planning and implementation, some aspects may indeed become more efficient, such as the digitalisation of spatial maps, simplified permits, and increased ease of investments. But to what and whose extent can this be actuated?
Uncovering such narrative involves, among many important aspects, providing alternative urban discourses and repoliticizing the voices of those increasingly marginalised trapped within the process actuating local autonomy, politicizing spatial planning, rights to land, and communal space, as well as rights to work and rights at work, among others.
References
Danish Khan & Anirban Karak (2018) Urban development by dispossession: planetary urbanization and primitive accumulation, Studies in Political Economy, 99:3, 307–330, DOI: 10.1080/07078552.2018.1536366
Doner, Richard & Schneider, Ben. (2016). The Middle-Income Trap. World Politics. -1. 1–37. 10.1017/S0043887116000095.
Harvey, D. (1978). The urban process under capitalism: A framework for analysis. Oxford: Blackwell.
Sato Y. (2019) Reemerging Developmental State in Democratized Indonesia. In: Takagi Y., Kanchoochat V., Sonobe T. (eds) Developmental State Building. Emerging-Economy State and International Policy Studies. Springer, Singapore. https://doi.org/10.1007/978-981-13-2904-3_4
