Housing Crisis: Aftermath of the Short Nixon Embargo
During the second Nasution term, there was an embargo punishing Indonesia because of the United States. Nixon distrusted Indonesia because of their secret agreement with the French, gaining them the entirety of Madagascar for corporation rights in Indonesia’s most valuable mining regions, hence competing with the United States. The embargo, however, was as short-lived as the presidency itself, and Shafer lifted it immediately after his ascension. In Indonesia, however, the effects did not tire out as fast as lifting one embargo.
During that embargo period, Indonesia quickly had an economic stagnation, then almost a ruin. Companies cooled down, and most of the businesses in Java closed. After the embargo was lifted, Indonesia was recovering. However, several policies were dropped because of it, one of them was the housing project. Mostly in the third term, Nasution focused solely on building infrastructure. Networks of roads and rails were being constructed, the growth was pacing on lightning speed. Even with the capacity of an Indonesian economy, $354 in GDP per capita, Trans Java was completed while Trans Sumatra was partly finished. He neglected one program which he had done in the previous term, which was public housing.
After the Australian Aggression War, most of the population in towns became estranged due to extreme bombings by the enemy. Because of that, most of the population migrated back towards their villages. Nevertheless, as cities were portrayed much by citizens as a source of money, most of them remained reluctant of going home, therefore building illegal buildings; shacks that located near strategic places, like rivers or train tracks. They made new lives albeit in inadequate conditions. As the population started growing back into its original status before the war, the housing was still yet unrepaired. Most fixed housed were particularly on
Ring 1 or owned by the elites. Everything else was neglected. At first, Nasution thought that construction companies, which had profited from building toll roads, must be obliged on reconstruct most of the people’s homes. Subandrio agreed also, as these companies were extremely rich, and surely making public houses were no big deal.
In a form of Housing Act, Nasution commanded all construction companies that involved in TJIP (Trans-Java Infrastructure Program) and TSIP (Trans Sumatra Infrastructure Program) to contribute at least 10% of their revenue for building public houses in form of stacked buildings. However, these form would be given towards the middle and lower class of the spectrum, which mainly caused the building to be named ‘
Rumah Susun’. Starting in 1973, most of the public housing program was given to the enterprises. At first, it was fine, the progress carried on smoothly, but it changed after 1977.
View attachment 554738
Gelora Senayan, under construction. The only Nasution's prestigious projects finished before the Sixth Amendment. Most of the others, either had their plan revised, or scratched completely.
The difference between a government-led operation and corporation-led was what happens when that work was proven to give shortfalls. Jasamarga Construction Company had been pleased when being part of strategical projects that help to improve the nation. But, when it came towards one of many of Nasution’s prestigious projects, which previously planned by President Sukarno, Jasamarga was starting to find some blunders. These prestigious projects, like Gelora Senayan, a football stadium that was meant to be the largest on Asia, Taman Peringatan Agresi Inggris-Australia, a Central Park-esque in the rubbles of Sawah Besar and Ketapang and Jakarta Landmark, a high-rise complex in Setiabudi that was insanely consumptive.
Gelora Senayan started building since 1976, and Jasamarga took a huge toll on building it. As the TJIP and TSIP were still ongoing, Jasamarga must abandon their housing projects. Similar predicaments happened to other companies subjected to Taman Peringatan and Jakarta Landmark. As a result, public housing stagnated, albeit want still high. Therefore, it caused a Housing Crisis, happened especially in cities.
In 1977, house cost gradually rose, and it reached a peak where subsidies were no longer useful for those lower class that needed those houses.
Rumah Susun became ridiculously expensive, and with the building’s simplistic design, not even the rich was intrigued to buy it. Instead,
Rumah Susuns turned inhabited, and the poor returned to their illegal structures and caused a massive social crisis.
Cities revealed a massive gap the Nasution Administration had created, specifically in Jakarta. While everything South from Monumen Nasional had lavish structures and advance public transport, everywhere else had slums. As
Rumah Susuns located mostly on the projected
Ring 2, or outside
Ring 1, Jakarta had become a city that had a ring of broken and unpreserved buildings. Most of the people could not afford to pay the fees. These people were labours which worked in industrial centres, so most of them flocked towards regions like
Cengkareng and
Pulo Gadung, resulting in an overpopulation problem there.
Subandrio was eager on solving this issue that was not only plaguing on Jakarta but also other cities like Medan, Surabaya and Bandung. However, recognising that this matters rooted in Nasution’s egoistic spending, Subandrio had a really hard time passing any bills to solve this problem. He pushed for stopping all those prestigious yet wasteful plans, yet that plan was vetoed by the President himself. He briefly noted Subandrio that most of these projects were finishing as well, so he suggested to just wait. Subandrio, already anxious of this, reluctantly waited, as PNI-R still hold a significant influence on DPR. Moreover, PKI was slightly rebelling against the Coalition. Aidit retired in 1976, and Brigadier General Untung took over the party. Alas, Untung was close to Major General Suharto, and maybe tried to negotiate with the former Premier.
Subandrio’s stance against the Presidency was confirmed with Lee Kuan Yew’s Malayan Base. In the Malayan Region, the embargo done by the United States was largely untouched. Organisations were coming from multiple nations, although closely allied with the United States, they were slow to follow Nixon’s urges. In addition to it, Indonesia’s economy didn’t constrain the region, as Nasution gave them autonomous benefits.
Nasution’s plan backfired when Malaya’s economy was given a two-year lead against the rest of Indonesia due to the embargo. Even with no aid from the federal government, the region could sustain itself long enough, and even starting to develop slowly. The monarchies from Malaya were the ones stopping the region from independence because of their fondness towards kingdoms in Java, and mainly because Malaya top politicians like LKY were already inside PPP, who was already partially controlling the government.
LKY, seeing his chances, campaigned his political views in newspapers. He declared that Malaya, the former British East Indies, was the saviour Indonesia did not consider at all and wasted her chances. People in Java was starting to believe in LKY, and youngsters proceeded on holding demonstrations criticizing the housing crisis. In 1978, a nation-wide demonstration was held by students from universities, along with civilians that had lost their homes with increasing fees. The demonstration was peaceful, but it grew so big that the entire city of Jakarta was flooded with people. Nasution, aware of the numbers, finally obliged with the people demands, and rather than concluding with the Housing Crisis, Subandrio instead went much further, restricting the President’s power in the premiership.
In 1978, the Sixth Amendment was ratified by the MPR. The law restricted most of the President’s power in DPR, making the Premiership had more flexibility. There were also more changes, but most of them aimed for economic and social changes. Economy and Trade Minister Frederik Trihandoko established reforms regarding BUMN and Federal District. While BUMN’s fields expanded, to gain revenue on foreign companies which exploiting Indonesia’s natural resources, a 20% share from net production. It meant that companies like Chevron, Shell and Total must give the government at least 20% share of profits, or not have their license lifted.
It was two birds one stone for Subandrio. The encasement of Nasution not only prevented him from interfering in the Premiership but also weaken his popularity. Indonesia, unlike the United States, still had citizens lack interest in foreign policy. So, whoever controls the domestic government controls the population. A strong foreign policy could not persuade people into voting, but a good domestic can. By the beginning of 1978, PNI-R was fading and even started rupturing.
==================================
This is the last chapter for
Rivalry and the next would be talking about the General Election of 1978 and Madagascar.
ITTL Indonesia without 1965, PKI still exist, and no OTL Suharto with that frightening figure. Therefore, demonstrations were not oppressed as before, and free-thinking is still available. Economy-wise, Indonesia ITTL is similar to 1980s OTL, a bit better but considering the territorial extent, I think it is balanced.