Java Gets a Transformative New Road

In 1995, construction started on the 1,167-km Trans Java Toll Road, designed to transform the country, running from Merak in the western province of Banten to Banyuwangi in East Java. Disruptions like the Asian Financial Crisis of 1998 and the global meltdown of 2008 have delayed completion.

It has taken 23 years to build the tollway in dozens of sections through forbidding terrain and through a long series of political regimes ranging from the strongman Suharto to the current President, Joko Widodo. Expected to be completed in 2020, it is part of Jokowi’s plan to develop land infrastructure as a driver of economic growth.

“By linking producers to markets, workers to jobs, students to school and the sick to hospitals, roads are vital to any development agenda,” according to the World Bank. Developing countries get outsized benefit from development of transport networks, potentially involving high returns on investment given decreasing returns to scale. The low density of public services in many developing countries also makes reliance on transport especially crucial.

As segments of the Trans Java Toll Road have opened, it hasn’t been without cost. In the first week that 116 km opened in 2015 between Cikampek and Paliman, three people died and 15 accidents occurred as drivers used to bullock paths found themselves on high-speed paved roads. Three weeks later, 56 accidents had killed 12 people, most of them because people had fallen asleep, were speeding, or were using the emergency lane at high speed. They apparently have since settled down and become aware of the danger.

As the World Bank noted, “while roads bring economic and social benefits, they can also come with social costs such as pollution or deforestation.” Indonesia’s Ministry of Public Works and People's Housing has estimated that the highway has contributed more than 50 percent to economic growth. The efficiency of ground shipment in Java, formerly centered on the smaller, less efficient roads, has increased exponentially.

However, the operation of the Trans Java Toll has its own opportunities and challenges. Much of the segments that are opened are already traffic-choked, with the volume of traffic continuing to increase from year to year with an average traffic growth of 3 percent.

This is because the alternative, the Pantura non-highway lane, the Java north coast road built during the reign of governor-general of the Dutch East Indies Herman Willem Daendels between 1808 and 1811, originally known as the Great Post Road, is one of the main crossroads of national economic corridors for the movement of goods and services. The proportion of truck traffic in the north coast more than doubled in just five years. The condition was also exacerbated by the mixing of local and long-distance traffic such as during the Eid holidays at the end of Ramadan, choking the roads.

Thus the Trans-Java highway is a fresh breeze for the distribution of goods and services in Indonesia.

Challenges to local economy

However, the Trans Java highway also brings challenges to the local economy as traffic switches onto the through highway and away from local use. During the Eid holidays, fixed and seasonal traders cater to motorists, earning turnover of up to Rp300,000 (US$20 per day.

However, since the Cipali Toll opened in 2015, the decline in turnover along the local road has driven many of business, resulting in increased unemployment, although statistics don’t indicate how much.

The Indonesian-language publication Kompas also noted declining numbers houses and food stalls operating in the Brebes district in Central Java in 2016, with restaurants reduced from 154 units in 2013 to 111 in 2016. Houses and food stalls in the Pemalang regency in Central Java decreased from 63 units in 2012 to 44 units in 2016. The other sectors affected are fueling stations, transportation and hotel or residences, a demonstration of the dependency of local businesses on the movement of people on the local roads.

Drivers stop on local roads. On tollways, they don’t Several strategies have been initiated to attempt to revive the eroded turnover. The area which becomes less strategic because it is not passed by the cars again encourages the economic actors to move their businesses to places where many cars are passing.

Call for Solution

The Minister of Transportation, Budi Karya Sumadi asserted that the operation of the Trans Java highway shouldn’t “kill local economy and traders.” But dislocations are inevitable despite solutions raised to attempt to keep the local economy in check, including a call for toll road operators to provide portions for local businesses. Highway-oriented towns in particular have a much more difficult time finding a way to transition their economies. In many cases, entire towns are bypassed, leaving them to wither.

The solution in more mobile societies is for business actors to relocate to areas with more traffic. Indonesian families who have lived in the same communities for decades are harder to displace. Local governments and the business communities need to work together, marketing, redeveloping and taking other steps.

The government has suggested directing local businesses to enter the world of e-commerce, calling on local governments and local business actors to improve their creativity and innovation Small and medium entrepreneurs are encouraged to transform their businesses into e-commerce.

But the fact is that with major transformations of the landscape through such things as highway construction, disruptions take place. While there are inevitable dislocations, the economic benefit of such operations as the Trans-Java road are undeniable. Some actors will struggle.