Business Activities Halted: What the Government Can Do to Help

Business Activities Halted: What the Government Can Do to Help

Wendy Haryanto
Executive Director, JPI

Did you know that Jakarta’s waste-choked waterways, rising sea levels, and the country’s sinking landmass has been contributing to some of the worst floods in the world? We can say without question that Jakarta is facing a long list of urban issues: floods, a lack of affordable housing and green initiatives, and the worst traffic congestion in the world are just a few that come to mind. Despite Jakarta’s problems, the property sector has shown relative resilience in the past. However, as the city becomes less livable and sustainable, the sector’s growth has reached its limits.

The property sector (real estate and construction) plays a vital role in Jakarta’s economic growth. It accounts for more than 20% of Jakarta’s GDP, impacts more than 100 other industries, and creates jobs in the city. And as the backbone of Jakarta’s urbanization initiatives, it would make sense to help property players with their ease of doing business rather than to slow it down. After all, those players have a vested interest in the betterment of the city. Its economic growth directly correlates with the growth of their own assets.

Unfortunately, that is not the case here. The World Bank’s research indicates that Indonesia’s ease of doing business is in the lower ranks, comparable to countries like Kenya and El Salvador. Jakarta’s fast-paced development in the last 36 months has made it clear that existing regulations might be ineffective or even hinder business activities, ranging from building permit applications to city zoning.

For example, unclear and conflicting permit regulations slow down developers from obtaining ‘sertifikat layak fungsi’ (SLF) certification. Without SLF:

  • Tenants association, whose role is to collect building maintenance and service fees from tenants, cannot be formed yet. Developers then has to shoulder those fees.
  • Developers are unable to lease space for banks and ATMs
  • Developers are unable to process Deeds of Sale (Akta Jual Beli) for buyers, and thus buyers are unable to get a mortgage from banks.

With these issues in mind, owners of high-rise, high-density buildings in Jakarta came together as a unified voice to reconcile the issues affecting their industry. They realized that they couldn’t engage the government on an individual basis and chose to advocate collectively. Thus, Jakarta Property Institute (JPI) was formed as the advocate that bridges their members’ interests with the city government to support Jakarta’s property development, and in turn its economic growth.

But the hurdles that stall Jakarta’s growth cannot be resolved one-sidedly by JPI and its members. A collaborative effort could do so much more than either the public or private sector could achieve on their own. So let’s build a better Jakarta together.

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