Making Urban Investment Planning Work: Building on the Indonesian CDS Process



Approval Date
Proposal Focus
Core Focus
Secondary Cities
Country Type
Lesson Learned for Cities Alliance Members and Partners
During the national workshop, the lessons-learned were summarized by the partners : 1. The inclusive CDS planning process among important city development stakeholders produces strong vision, and valid city priority programs. 2. The success program needs committed local stakeholders/ champions support. The active involvements of stakeholders promote the commitment support of stakeholders. 3. The spatial based planning process promotes the integration and focus of sectoral programs to the priority area. 4. The matching between city and national priority programs promotes a synergized city development investment. 5. Some cost recovery programs of city development could be cooperated with the private sectors investment.


Indonesia's population of over 220 million people is growing more rapidly in urban areas than in rural ones. In the past ten years, all urban areas have had a vital role in creating increased employment opportunities and economic growth. However, investment in urban amenities is lacking. This is primarily because the provision of social services and urban infrastructure was decentralised in 1999 to local authorities, who lack experience and have limited access to funding in Indonesia's strongly centralised tax system. This proposal aims to contribute to finding adequate mechanisms to put local amenity investments in a context of decentralised governance, building on the city development strategy (CDS) experience to better integrate the CDS approach and to incorporate a "city-wide financing" methodology into the Mid-Term Investment Programming (RPIJM). The RPIJM is an approach and a tool-kit formulated by the Directorate General for Human Settlements (DGHS) that links up feasibility studies and financial planning for investments within a framework of city-wide development and financing strategies.
The Programme to be supported by the Cities Alliance establishes cooperation between the Directorate General for Human Settlements and three cities in Indonesia that already practice good governance and invest in better urban environments: Banjarmasin, Pekalongan and Surakarta. This cooperation encourages the three "good practice" cities to drive further the development and dissemination of effective city investment planning under the RPIJM label. The three cities will develop and showcase pro-poor and participatory city-wide development and financing strategies, while the DGHS underscores their efforts by channeling investment funding to the cities on a priority basis. Together, DGHS and the cities will document and disseminate proven and validated good urban management and investment practices to new cities, making use of the RPIJM facilitator network, the Urban Sector Development Reform Programme (USDRP) city network, and city-to-city networking directly undertaken by the three cities in collaboration with a national local government authority.    
1.) Set-up and initial networking of project teams. The activities will be initiated with the set-up of a national project team and city project teams, consisting of the implementing partners and supported by the consultants hired for the programme. 2.) Re-formulation and re-validation of city development strategy, also called "Strategi Pembangunan Kota" (SPK) in Indonesian, and Mid-Term Investment Programming (RPIJM) documents at the city level. 3.) Short-listing and facilitation of investment initiatives and mobilisation of stakeholders to validate the prioritisation of the respective initiatives for follow-up funding. 4.) Capturing and exchanging of the experiences in the three cities.
Expected Impacts and Results
The Ministry consolidated its approach under the RPI2JM programme. What is different now ? The earlier RPIJM, as it was known at the start of the project, aspired very detailed sectoral planning and programming to be synchronised with an overall vaguely participatory city strategy. During the project preparation, it was established that these city strategies were most often no more than generic mission and vision statements for the future of the city. Having invited the Cities Alliance support, DGHS started off with the expectation that mayors should set a better and more specific common infrastructure investment strategy (“CDS”), while line departments and sectors should come to detailed and synchronised master plans in line with the strategy. The drawbacks remained serious: mayors wanted action plans, not master plans; they wanted priorities agreed and acted upon; they were not interested in sectoral master plans, especially if static plans became a road block to the mayor’s vision and priorities; and they wanted DGHS to support their priorities rather than taking on projects in isolation, defined by sector and sub-sector plans and interests. The CDS project showed that committed mayors could work out comprehensive and rapid city development strategies, focused on a number of priority investments and spatially defined development areas to which several city departments could respond together. In all three pilot cities where the project supported the development of ‘city investment profiles’, this was seen as an inspiring exercise, especially in Pekalongan and Banjarmasin. At first, the project didn’t push for a formal alignment with the official land use plans, but used city planning instruments to work out area-based priorities, around which several city departments could mobilise. In RPI2JM, the land use plan become more important. To no surprise, the new formal approach of DGHS added the necessary additional regulatory clarity, by insisting that cities frame their priorities against their official city land use plan (RTRW) as approved by the local parliament. An added benefit of spatial prioritisation is accountability: any sectoral intervention must be pinpointed on a map and must be in justifiable priority location of the city. Finally, RPI2JM also introduced more objective criteria for the national prioritisation of development funds, earmarking most funding opportunities to cities which are recognised as nationally strategic by the national parliament (e.g. economic hubs, green cities, heritage cities, …). Overall, on this basis, DGHS has created a regulated framework allowing it to support cities which undertake participatory and strategic cross-sectoral planning (‘CDS’), with objective constraints related to land use planning and national funding priorities. The three cities utilized the CDS to mobilize investment for their city. All cities have shown progress in their infrastructure planning and development that is in accordance to their city vision. Banjarmasin even absorbed the strategy from CDS to their long term planning. For the national government, the CDS approach has been absorbed into the new integrated guideline on RPI2JM. An extensive number of cities have responded well to RPI2JM. The local governments under cluster A and/or B (recognised as nationally strategic and/or having an approved spatial plan and building regulation) are more eager to prepare the RPI2JM due to the national funding opportunity coming along with it. They also received the technical facilitation from the DGHS in the province in the most positive way. The wide-ranging activities from CDS have also increased the participation of different stakeholders for a more inclusive planning process, improved the communication horizontally and vertically as well as increased the capacity building of the stakeholders.