Urban renewal: An old neighbourhood in Jakarta. The Indonesian government is seeking to turn the housing sector into a major contributor to economic growth. — Bloomberg
JAKARTA: President-elect Prabowo Subianto is set to establish a Housing Ministry when he assumes office on Oct 20 with his aide claiming the next administration will allocate 53 trillion rupiah or about US$3.42bil to the ministry for its first year.
This move will see the ministry split from the current Public Works and Housing Ministry as Prabowo seeks to position the housing sector as a linchpin of economic growth under his presidency.
Hashim S. Djojohadikusumo, Prabowo’s brother and head of the president-elect’s housing task force, said the ministry has been included in the 2025 state budget bill, which is still under deliberation by the House of Representatives and the government.
“We’ve already included the figures in our draft state budget for next year. Pak Prabowo has given his approval; we will reinstate the Housing Ministry as it was in the past,” said Hashim last Saturday.
Indonesia last had an independent Housing Ministry in 2014, before President Joko “Jokowi” Widodo consolidated it with the Public Works Ministry upon succeeding Susilo Bambang Yudhoyono.
The housing sector is expected to be a major driver of economic activity, with Prabowo targeting a contribution of 25% to the national economy and supporting his ambitious goal of 8% gross domestic product growth every year.
Meanwhile, the housing sector currently contributes only about 3% to the national economy.
Hashim, who has been leading the task force for the past four months, suggested that the government should supply at least 37 million housing units to close the housing gap and improve living standards across the country.
In his presidential election campaign, Prabowo pledged to build three million houses annually to address the country’s housing deficit, tripling the target set by Jokowi during his tenure.
Prabowo’s housing plan includes constructing one million homes in urban areas for low-income families and two million in rural regions, with a focus on coastal areas.
The development of the homes, particularly the two million in rural areas, would not be handed over to large property conglomerates, Hashim pointed out.
Instead, the responsibility would fall on small and medium enterprises, cooperatives and region-owned enterprises.
In Jakarta, for instance, the strategy would involve a partnership between the central government and the Jakarta provincial administration to modernise vertical housing connected to traditional markets, operated by the city-owned market operator Perumda Pasar Jaya.
The rapid renovation of these markets and the construction of residential complexes on top of them are key components of Prabowo’s vision for urban renewal, Hashim highlighted.
In Jakarta alone, he aimed to construct apartment units above 193 traditional markets in Jakarta as fast as possible, which would include access to clean water, electricity, air conditioning and Internet, which Hashim described as “Prabowo’s commitment to eliminate urban slums”.
“If each Pasar Jaya market can accommodate 1,000 apartment units, depending on the construction plan, we can provide decent housing for 153,000 families,” Hashim said. — The Jakarta Post/ANN
