In recent years, Indonesia has madegreat strides in economic growth and development. Thisgrowth has been accompanied by rapid urbanization that hastransformed Indonesian cities. Urbanization has thepotential to boost national economic growth by facilitatingthe emergence of agglomeration and localization economies.Increasing urbanization presents Indonesia with anopportunity to leverage the transformation taking place toensure that it is harnessed for economic growth and, moreimportantly, sustained improvements in the quality of lifeof its community members. Unfortunately, research shows thatover the last four decades, Indonesia has not derivedoptimal returns on urban development, as can be seen bycomparisons with the level of benefit derived by other Asiancountries passing through similar processes of urbanization.Urbanization in Indonesia is driving the emergence ofmetropolitan areas whose boundaries stretch beyond thejurisdiction of administratively defined cities, creating anurgent need for mechanisms that optimize and coordinatedevelopment beyond the formal city unit. The purpose of thisreport on Indonesia's regional and urban development isto provide a comprehensive assessment of the country'sspatial patterns of urbanization and economic developmentand to evaluate the extent to which Indonesia'surbanization has fostered increases in agglomerationeconomies and economic productivity growth. The studyprovides the analytical work to evaluate such performanceand to identify key issues, constraints and opportunitiesfor promoting faster and more inclusive growth. Theoverarching goal of the study is to provide a timely andrigorous analysis of regional and urban development in orderto foster informed policy discussion at the central,provincial and local government levels.
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