A recent report by Euromonitor International has predicted that Jakarta, Indonesia’s capital city on the island of Java, will become the world’s most populous city by 2030. That prediction includes the population in the metropolitan area, not just the city proper. According to the report, the population of Greater Jakarta will grow by 4.1 million people to reach 35.6 million, while Tokyo will shrink by two million down to 25.4 million. If that prediction holds true, Jakarta will be the first city from an emerging economy to hold the title.
High rates of population growth in Jakarta can bring significant economic benefits to Indonesia and could help attract investors to the city. To fully utilise this, however, there needs to be greater investment in human capital, such as through education and skills training. In an interview with Bloomberg, Indonesian Finance Minister Sri Mulyani Indrawati emphasised that investing in human capital is vital, if Indonesia is to move from a middle-income economy to a high-income one in the long-term. That is because adequate human capital investment will allow high rates of population growth to be focussed within the middle- and upper-income classes, which would act as a catalyst for economic growth and potential investment.
There are significant challenges that come with high population growth in Jakarta. Being the second-most populated city in the world, Jakarta already faces serious issues, such as poor traffic, inadequate infrastructure and flooding. An extra 4.1 million people in 2030 will only exacerbate these problems.
Poor traffic is an issue that is especially vulnerable to high rates of population growth. According to the INRIX 2017 Global Traffic Scoreboard, Jakarta is ranked as the twelfth worst in the world with drivers spending 23 per cent of their commute in congestion. This carries a significant economic cost. Bambang Brodjonegoro, the Minister of National Development Planning, estimated that congestion has caused losses of around 67.5 trillion rupiah ($6.2 billion) per year. To remedy this, the Indonesian government has introduced policies such as the odd-even policy to limit the number of vehicles on the road during peak hour. While this may be an effective short-term solution, it does not address any underlying issues and simply shifts the burden onto Jakarta’s struggling public transportation system. Significant investment in public transport infrastructure will be needed to improve the system, which needs to be wider reaching, more consistent and also more convenient for commuters.
Another significant problem that could be exacerbated by the growing population is the fact that Jakarta is sinking, faster than any other big city on the planet. This is especially problematic in North Jakarta, which sits by Jakarta Bay. In the past ten years, land in this area has sunk by 2.5 metres, twice as much as the global average for coastal megacities. At that rate, ninety-five per cent of North Jakarta could be under water by 2050 if no preventive measures are put in place.
The process is likely to drive many of the residents further into Jakarta, potentially overcrowding other districts. Flooding will also continue to be a problem. Much like many of Jakarta’s other challenges, addressing this issue will require investment in infrastructure projects, such as seawalls, canals and access to water that does not deplete the aquifers under the city.