President-elect Prabowo wants to make the housing sector “massive”, given its multiplier effect on overall economic activity. — The Jakarta Post
JAKARTA: A top adviser to president-elect Prabowo Subianto has said that the incoming administration plans to build three million housing units per year and that smaller businesses rather than big construction conglomerates are to get the largest part of the pie.
Speaking at an event organised by the Indonesian Chamber of Commerce and Industry (Kadin) on Monday, Hashim Djojohadikusumo said Prabowo wanted to make the housing sector “massive”, given its multiplier effect on overall economic activity.
“Big contractors, go ahead. Everybody has a stake in the pie. The pie is very big,” said Hashim, after explaining that the government would only allow the property groups to get involved in the development of one million apartments per year in urban areas.
He suggested that the development would involve foreign financing and advice: “I have met with the leadership of the Housing and Development Board (HDB) in Singapore; HDB will help us as an adviser and consultant, the name of the company through which this would happen is Surbana Jurong. They’re willing to help us.”
The other two million units, meanwhile, are planned for rural areas and to be handled by medium, small and micro enterprises (MSMEs), cooperatives and village-owned businesses (BUMDes). In addition to newly constructed houses, this also includes renovated properties.
Hashim, who is also Prabowo’s brother, argued that the housing development plan might bump up the archipelago’s economic growth by “about 1%” and that “the money will circulate within the villages” instead of “flowing abroad”.
The rough picture comprises building or renovating 20 to 30 houses in rural areas every year for Indonesia’s 75,000 villages, which brings the total to 1.5 million to 2.25 million annually.
He went on to say that there was a backlog of 10.7 million housing units in the country, on top of 27 million households living in residences categorised as uninhabitable.
The plan is to provide housing or renovating credit to “farmers and fishermen” who generally already own a plot of land, “which means land procurement or acquisition will not be a problem”, Hashim claimed.
“And, of course, it’s impossible to tackle the plan full scale in the first year of Prabowo’s government, but at a steady state, it may come into full effect in the third year,” Hashim said.
He confirmed earlier-announced plans that Prabowo would establish a dedicated ministry specifically for housing, which is currently handled as one of multiple responsibilities of the Public Works and Housing Ministry.
Hashim said that prioritising housing was one of President “Joko” Jokowi Widodo’s programmes that would be continued by the president-elect.
He noted that Jokowi targeted erecting one million houses every year but only managed to build 200,000 annually.
He explained that the sector’s multiplier effect stemmed from the fact that building houses necessitated “supporting industries” like steel, cement and lumber, to name a few.
Paramadina University economist Wijayanto Samirin told The Jakarta Post on Monday that the housing sector was an “effective means” to create jobs and jack up economic growth, given its multiplier effect on 142 other sectors and subsectors. — The Jakarta Post/ANN
