Journal of Housing and the Built Environment

https://doi.org/10.1007/s10901-021-09859-4

ARTICLE

Slum‑upgrading trough physical or socio‑economic

improvement? lessons from Bandung, Indonesia

Haryo Winarso1 

Received: 14 March 2020 / Accepted: 7 May 2021

© The Author(s), under exclusive licence to Springer Nature B.V. 2021

Abstract
Since the 1970s, slums and squatters upgrading programs have been in the discussion of
scholars. The main question addressed is to what extent the programs contribute to the
improvement of slum dwellers’ livelihood. Based on a longitudinal study on such programs
in Bandung, this study aims to compare the’ programs’ result on five productive assets of
the community five years or more after the project completion.In Bandung, at the begin-
ning, the programs were focused on physical improvements based on the assumption that
if the physical condition is good and the tenure security is improved, then the people will
help themselves. The reality, however, was different; there were no significant achieve-
ments in poverty reduction. The second generation incorporated social concern through
participatory planning. The third generation attempted to improve the quality of life of
squatters or slum dwellers by improving the physical condition of the slums and squat-
ters and the dwellers’ social and economic conditions after project completion.The paper
argues that while the first generation of slum upgrading did not show any direct significant
contribution to poverty reduction (both during and by the end of project life), the physical
facilities that it developed, (which are of much better qualities and thus last much longer
than facilities built in the second and third generation), indirectly enable the social eco-
nomic improvement of slum-dwellers in the long term.

Keywords  Bandung · Indonesia · Kampung improvement · Poverty alleviation ·

Sustainable livelihood · Slum upgrading

Abbreviations
ADB Asian Development Bank
BKM  Badan Keswadayaan Masyarakat (Self-help Community Organisation)
BP4K  Badan Pelaksana Penataan dan Pembangunan Permukiman Kumuh
(Slum Area Planning and Development Implementing Board)
BTN  Bank Tabungan Negara (State Saving Bank)
BUDP Bandung Urban Development Project
BUDS Bandung Urban Development Strategy

* Haryo Winarso
hwinarso@pl.itb.ac.id
1
School of Architecture Planning and Policy Development, Bandung Institute of Technology,
Bandung, Indonesia

13
Vol.:(0123456789)
 H. Winarso

CDF City Development Fund

Co Bild Community Based Initiatives for Housing and Local Development
EBSI Executing Board for the Slum Improvement Program
FGD Focus Group Discussion
JICA Japan International Cooperation Agency
JPS  Jaring Pengaman Sosial (Social Safety Net)
Kecamatan Sub-District
Kelurahan Sub Sub-District (Village)
KIP Kampung Improvement Program
KSM  Kelompok Swadaya Masyarakat (Self-help Community Group)
KSU  Koperasi Serba Usaha; General Cooperative
LKMD  Lembaga Ketahanan Masyarakat Desa (Community Resilience
Organization)
NGO Non-Government Organisation
NUSSP Neighbourhood Upgrading and Shelter Sector Project
P2BPK  Pembangunan Perumahan yang Bertumpu Pada Kelompok (Commu-
nity Based Housing Development)
P2KP  Program Pengentasan Kemiskinan Perkotaan (Urban Poverty Allevia-
tion Program)
P3KT  Program Pembangunan Prasarana Kota Terpadu (Integrated Urban
Infrastructure Program also known as IUIDP)
PERUMNAS  Perusahaan Perumahan Nasional (National Land Development
Company)
PLPKP2  Peremajaan Lingkungan Perumahan Kota dan Pengembangan Per-
mukiman (Urban Renewal and Housing Development)
PNPM  Program Nasional Pemberdayaan Masyarakat (National Program for
Community Capacity Building)
RSS  Rumah Sangat Sederhana (Decent Housing)
RT  Rukun Tetangga (Households Groups—consisting of 10 – 15
households)
RW  Rukun Warga (Neighbourhood Community Organization- consisting of
5 to 10 RT)
SAPOLA Slum Alleviation Policy and Action Plan
SSPAP Squatter Settlements Pilot Assistance Program
SUL Sustainable Urban Livelihood
Tribina Concept Three-fold improvement concept i.e.: social improvement, economy
improvement and physical and environment improvement
Tridaya concept Three-fold empowerment concept i.e.: economy, social and housing
empowerment
UNEP United Nations Development Programs: a program sponsored by
UNDP—(United Nations Development Program), known as UNEP
Experiments
WB World Bank
UNESCAP United Nations Economic and Social Commission for Asia and the
Pacific
WHC Wilhelmus Hofsteede Consultant

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Slum-upgrading trough physical or socio-economic improvement?…

1 Introduction

The growth of squatter and slum settlements1 in developing countries is alarming; its num-
ber keeps on increasing. Data from United Nations (UN) Habitat (2010) shows that the
numbers of people living in slum areas in the Asian and Pacific urban regions increased
from 501,868,000 in 2007 to 514,249,000 people, corresponding to a 10.6% increase in
3 years. UN Habitat (2020), in its the World Cities Report 2020, stated that the number of
people living in slum areas in the world have reach 1033.5 million in 2018. To deal with
the problems, world governments signed The New Urban Agenda manifesto in Quito in
2016 and called for more attention to slums and informal settlements (UN Habitat 2010);
The 9th World Urban Forum in Kuala Lumpur in 2017 reinforced this manifesto by stating
that governments should give a political commitment to prioritising slums and informal
upgrading (UN Habitat 2013). Slum settlements are always associated with urban poverty;
however, efforts that have been made so far through slum upgrading are not directly related
to poverty alleviation (e.g.: Khalifa 2015).
Despite the claims that the recent upgrading approaches that incorporate physical reha-
bilitation, participatory methods and socio-economic assistance have shown good results
(Majale 2003; Das et al. 2002, Das 2018) and that it is possible for scaling up with certain
condition (Majale 2003), the number of slum dwellers in the world is still increasing. UN
statistic (2019) reports that the proportion of the urban population living in slums world-
wide grew from 23 percent in 2014 to 23.5 percent in 2018. raising a question on which
approach works best and can be replicated.
Most of the study focusing on best practices and success story of the approaches were
carried out when the projects were still underway or immediately after the completion of
the programs.. There has been very few study that focus on the practices’ impact five or
more years after the completion of the project. Therefore, one cannot be sure which slum
upgrading approach gives a better effect on improving housing, social and economic condi-
tions and, ultimately, poverty alleviation.
Similarly, slum upgrading and poverty reduction have been on the Indonesian govern-
ment’s ’agenda, but to what extent these efforts have reached the target remain to be stud-
ied. Against the above background, this paper’s objectives are two folds: First, to assess
the extent of slum upgrading efforts in Indonesia, using Bandung as the case study city.
Second, to evaluate the contribution of slum upgrading program in improving the poor’s
five productive assets to alleviate poverty.
The evaluations are focused on projects that have been completed for more than five
years to enable to see the long-term impacts. The article is largely descriptive and it is not
intended to be a critical review of development theory and practice in Indonesia’s context.
It is argued that although the first generation of slums upgrading did not significantly con-
tribute to poverty reduction in the short term, it developed physical facilities that are better
and last longer than those produced in the second and third generations. Those high-quality

1
  UH Habitat (2003) defined living in slum condition as a household lacking one or more of the follow-
ing indicators: 1) access to improved water, 2) access to improved sanitation, 3) access to secure tenure,
4) durability of housing, 5) sufficient living area. Traditionally slum is defined as dilapidated settlement
condition with no adequate sanitation and water, but the dwellers may legally live in the area. Whilst squat-
ter is defined as people who occupied land or housing for living illegally. In this article, unless otherwise
explained, slums and squatters are used interchangeably.

13
 H. Winarso

facilities, in the long run, also showed association with the social-economic improvements
of the slum dwellers.
To this end, the paper will discuss literature, the method the slum upgrading in Indone-
sia, the condition of Bandung, the population and the slum upgrading programs, followed
by a critical assessment of the slum upgrading experience in the city. In the end, the con-
clusion and lessons to be learned are presented.

2 Slum upgrading approach trough time

It is widely accepted that slum and squatter settlements in developing countries are the
results of the ever-increasing population in urban areas either caused by over urbanisation
or natural population growth in the urban areas (e.g., Wakely 1986; Turner 1976; UN Habi-
tat 2010; Minnery et al. 2013; Malik et al. 2019). There is a view that slums and squatters
do bring substantial economic as well as social benefits. It has also been the focus of aca-
demic discussions which proposed alternatives for slums and squatter upgrading (Hardoy
et al. 1986; Turner 1976; Macoloo 1994), Choquill (2007), UN Habitat et al. (2005) and
recently Ozdemirli (2014) and Tipple (2015).
Efforts to upgrade slums and squatters’ conditions were initially influenced by World
Bank’s thinking. However, this attempt was later admitted to be unfavourable as mentioned
in World Bank Report: "…The program of the 1970s and 1980s reduced the cost of shelter
and infrastructure, but they did not usually reach the poorest households, nor was recovery
achieved…" (World Bank 1993, 3.13, see also Werlin 1999).
In the 1990s, the approaches shifted from government-led development to market-
led development, recommending a stronger market role and envisaging that government
should play more as "enabler" rather than "provider." The governments have to reform the
financial sector to enable the market to work. The view is that: if the market works well,
then people can have jobs. Thus, they can help themselves in improving their settlements’
conditions. For this to work, improving their economic capability is essential.
Slum upgrading has been carried out using different approaches; one that focuses on
improving physical condition (e.g., Turner 1976), legalises land tenure (Handzic 2010),
stresses the importance of participatory in the upgrading (e.g., Werlin 1999; Das et  al.
2002); and others argue that socio-economic improvement should be added as essential
elements in the slum upgrading (e.g., Sidique et al. 2002). Thailand’s Baan Makong Pro-
gram shows that the network and the urban poor’s ability to plan to meet their need is
critical for the program’s success (Andavarapu et al. 2013). Khalifa (2015) argued that the
participatory approach would work soundly in Egypt if there was a cooperation between
local government and active civil society. It is acknowledged that employment creation is
vital in the slum upgrading project (Majale 2003).
In the new millennium, squatter settlements upgrading includes physical upgrading
as well as social and economic improvements as an integrated approach by empowering
the squatter dwellers to improve their earning capacity. The importance of the integrated
approach in slum upgrading is now widely accepted; a paper from World Bank Sympo-
sium in 2003 by Majale (2003) explored the best practice of the integrated approach of
slum upgrading in Kenya and India. His study in the implementation of Integrated Urban
Housing Development in Kenya shows that the approach had improved the physical con-
dition and income-generating activities of Nakuru slums. Furthermore, his study shows
that 68% of the beneficiaries improved their income up to 64%, 55% had taken up more

13
Slum-upgrading trough physical or socio-economic improvement?…

Table 1  The longitudinal study and slum upgrading in indonesia

Source: Sapola (2011) and Kotaku (2018)
See the list of abbreviations in appendix 1

employments and that revolving fund played an important role. Majale’s (2003) study also
provides a success story of an integrated approach and revolving funds in Alwar, India.
Financial assistance in an integrated approach has also shifted from mere grants into
more selected and targeted subsidies. It was envisaged that subsidies should be carefully
targeted and preferably be one-time capital grants. More recently, a revolving-credits
scheme became an advisable approach for financing small developments and capitalising
income-generating activities as one component of the integrated approach. Various studies
have considered the approach in income-generating improvement by the revolving-credit
scheme with different results (e.g. Sidique, et  al. 2002; Winarso et  al. 2006; Yoshimoto
circa 2011). The more recent researches suggest that urban transformation can be carried
out gradually through private participation (Ozdemirli 2014) and that community funding
as in City Development Fund (CDF) has the potential for slum improvement (Sripanich
et  al. 2015; Sticzay et  al. 2015). Good coordination among government, community and
civil society can have a meaningful impact on slum upgrading (Das 2002; Khalifa 2015).
Although there is criticism that this coordination, government- community- civil society
fails to stay longer. (Das 2018). A study on slum rehabilitation in Mumbai, India, suggests
that education and employment in slum upgrading will not result in poverty alleviation
(Mukhija 2001; Sheth et al. 2009).

3 The method

This study is qualitative, longitudinal (1978–2019) and is aimed at explaining the slum
improvement programs carried out in Bandung (see Table 1 for slum improvement in Indo-
nesia and the longitudinal study). A purposive sampling strategy is utilised to explore the
impact of slum improvement programmes on the community. The concept of slum upgrad-
ing continues to develop; therefore, it is understood that the initial concept is not the same
as the last concept. To be able to compare these concepts, Sustainable Urban Livelihood
(SUL) approach is used based on the understanding that poverty is a matter of lack of
wealth and people’s vulnerability during shock and stress conditions due to the change
in their environment (Meikle et al. 2001). Essential to this approach is the understanding

13
 H. Winarso

that poverty is a dynamic condition; the poor move in and out of relative poverty as they
respond to the opportunities, shocks and stresses (Meikle et al. 2003; Moser 1996, 1998).
SUL approach envisages five productive assets, i.e., natural, human, financial/economic,
physical and social. These five assets will affect the poor’s reaction to the changes in their
environment (Meikle et al. 2003; Van Horen 2004; Winarso et al. 2002).
Based on these five assets, an evaluation framework2 was developed to categorise assets
or resources. As expressed by van Horen (2004), slum upgrading program can be quali-
tatively measured by the extent of change of those five productive assets. The program is
effective and gives long-term benefit only if it can build communities’ productive assets,
followed by a reform of governance institutions. Both are necessary for building institu-
tional capacity to mobilise political and economic resources needed to sustain the improve-
ment process. To better understand this notion, the affected people were asked about their
involvement in the project, how they managed the project and which productive asset the
project focused on. They were also asked about the management after the project had for-
mally finished as well as their opinion about the project. The observation was conducted on
the area’s physical condition and some photos were taken to show the upgraded element.
In Kelurahan,3 program sites are purposively selected as sample based on the visibility
of program results that leave traces to date. Data obtained in the form of a statement of
changes in sustainable livelihoods assets resulting from the improvement of slums in Band-
ung are compared with the criteria based on its benefit to the community as seen from the
five assets (Table 2 shows the criteria for assessing upgrading impact and attached value
for comparison):
Bandung (see Fig.  1) is chosen as the case study city for two reasons: first, Bandung
has executed several slum-upgrading programs since 1970s thus, the different approached
to slum upgrading can be observed; second, Bandung is the third biggest city in Indo-
nesia, after Jakarta and Surabaya. Its population is over 2.5 million; out of this 9.9% are
poor (BPS Bandung 2021); and in 2015 more than 10% of the areas were considered slum
(Dirjen Cipta Karya 2015).

2
  The framework is developed as evaluation tools to see what impacts the slum upgrading projects in each
generation have on the productive assets of the poor. Physical asset this is used to evaluate the physical
condition in slum area, in order to understand physical improvement priority. It is commonly perceived
as a general effort to upgrade slum area. Physical assets include housing condition and ownership, prop-
erty ownership and access to infrastructure. Infrastructure improvement includes sanitation, clean water,
waste management, circulation system (road and pedestrian ways), drainage, electricity system, education
and health facility and public space. Natural asset this is used to evaluate whether an effort to preserve the
natural asset in a slum upgrading project was made. It includes rehabilitation consideration and assistance
to community to rehabilitate the natural assets. Human capital asset this is used to assess human capital in
order to support community self-confidence. Parameters used in this assessment are area education, health
and community willingness to be active in organization. Development of this asset is expected to increase
community productivity. Social capital asset this is used to assess social relationship in the community. It
is used as a tool to improve slum physical condition, such as working together for road improvement, bridge
improvement, etc. Social relationship between community and government as well as and NGO can help to
improve slum. Economic asset this is used to assess economic institute or credit stock role such as Koperasi
(cooperative). It is an important asset development to facilitate poor inhabitant’s access to capital. Beside
institute or credit stock, legalization assets such as housing and land ownership certificate can also be used
as community access to capital. Security of tenure from poor community can also be used as capital to
increase their income.
3
  In Indonesia’ administrative structure is stratified into two levels of autonomous regions: Province (Pro-
pinsi) and District (the municipality or Kotamadya for urban areas and the regency or Kabupaten for else-
where). District level is further stratified into two levels: Kecamatan (sub-district) and Kelurahan for urban
areas and Desa or village for rural areas.

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Slum-upgrading trough physical or socio-economic improvement?…

Table 2  Criteria for assessing upgrading impact

Criteria *Score

There are no perceived benefits, or the condition of the asset does not change 0
Activities and benefits are only visible when the program is running 1
The benefits of the program are not visible or are currently in poor condition 2
The benefits of the program are still being felt today with good conditions 3

* The values are only as a reference to compare the condition of livelihood assets as a result of improve-
ments

Bandung is one of the fast-growing cities in Indonesia. Its administrative area was dou-
bled in the late 1980s to reach 16,770 hectares. The high urbanisation rate has caused a
significant increase in the need for housing for the poor and the failure to provide decent,
affordable housing results in the growing slums settlements concentrated in high-density
areas. The City Government has made various efforts to improve the condition of slums
settlements; despite these efforts, according to a government report (2015) the total area of
slum settlements in Bandung covers 1,457.45 hectares spread in over 454 areas. This study
purposively selected six (6) Kelurahan out of 81 Kelurahan receiving slum upgrading pro-
gram as the sample. (Figure: 1 showing the location of the selected Kelurahan).
Four field surveys were conducted within the study period. The first field research was
in 2007; data were gathered through focus group discussions (FGD) with affected people in
the upgrading areas. 4 to 5 people attended the FGD conducted once in each affected area
(5 Areas—see Fig. 1). In-depth interviews with ten key persons who were involved in the
upgrading program as project managers or project staff were also conducted The snowball-
ing method was utilised to find the key persons involved in the projects. The interview-
ees included: Former officials who were involved in the United Nations Environment Pro-
gram (UNEP Project); the former head of Bandung Urban Development Project (BUDP),
former officials of Public Works Bandung who were responsible for BUDP 1 and 2; the
leaders and/or secretary of the Self-help Community Organisation (Badan Keswadayaan
Masyarakat—BKM) of the projects. This study also relies heavily on secondary data, i.e.,
project guidelines, project reports, minutes of meetings and previous studies.
The second field observation to see the physical condition of the upgraded areas was
carried out in 2015. The third field survey which was conducted in 2018, included informal
interviews with the community and field observations to see the development in the areas.
Finally, between January and March, 2019 re-interviews with some of the 2007’ interview-
ees were conducted; as well as with more people in the community. (Table  3 shows the
informant in the 2019 interview).

4 Discussion

4.1 Slum upgrading in Indonesia

In Indonesia, where the total population was estimated to reach 272.2 million in 2020;
(206.6 million in 2000 according to BPS 2015) those living in urban areas, in 2029, will
be well above 57% of the total population (BPS 2021). Almost 71% of the urban popula-
tion were those from the middle-low and low-income groups. The urban population growth

13
 H. Winarso

Fig. 1  Case studies areas

rate which was estimated at 3.5% per annum during 1990 to 2000 is considered high. It
accounts for about two-thirds of the total population growth from 1980 to 2000. Mean-
while the population living below poverty line was 10.6% in 2020 (BPS 2021).
Based on a survey by Ministry of Public Works and Housing, it was estimated that up
to October 2014, there were 38,431 hectares of slum areas in Indonesia (Kompas, Decem-
ber, 2014). Only around 15% of urban population could afford to buy better houses. The

13
 Tabel 3  Projects and Informants in 2019
Program Informant In 2019 Status Informant Location (Kelurahan)

United Nations Environment Programme (UNEP) —1978 Ms. Sutikni Utoro UNEP Govt. Official (retired) Cikutra
Mr. Enoh Community informal leader
KIP—Bandung Urban Development Project (BUDP) I—1981 Ms. Sutikni Utoro BUDP Planner, govt. official (retired) Padasuka
Mr. Suparno Community leader and BKM members
KIP—Bandung Urban Development Project (BUDP) II—1986 Ms. Sutikni Utoro BUDP Planner, govt. official (retired) Warung Muncang
Ms. Naning Yuningsih Lurah and Community Leader Pajajaran
Ms. Dayat Hidayat Lurah
Peremajaan Lingkungan Perumahan Kota Dan Mr. Heri BKM Arjuna (Industri Dalam)
Pengembangan Perumahan (PLPKP2) Urban Renewal and Hous- Mr. Ganjar Budi Lurah
ing Development-1990
Slum-upgrading trough physical or socio-economic improvement?…

Program Penanggulangan Kemiskinan di Perkotaan (P2KP)— Mr. Zen West Java KOTAKU Coordinating Team Sadang Serang
Urban Poverty Alleviation Program-1999 Mr. Riana Rahardja Head of section. Community Services in Sadang Serang
Program Nasional Pemberdayaan Masyarakat (PNPM)— Mr. Syahruddin Syarif Tim Fasilitator Urban Planner Jatisari
National Program for Community Capacity Building—2008 Mr. Cecep Rusmana Head of BKM Kelurahan Jatisari
Program Penanganan Kawasan Kumuh Perkotaan (P2KKP)— Mr. Syahruddin Syarif Team Facilitator Urban Planner Sadang Serang
Urban Slum Area Improvement Mr. Riana Rahardja Head of section. Community Services in Sadang Serang

Note: Lurah is the head of kelurahan; for abbreviation see appendix 1

13
 H. Winarso

large majority, 45%, could only buy simple and very simple houses4 with a subsidised
loan scheme and the rest was only able to live in slum and squatter settlements through
the informal market system. The popular housing provision, the informal market, had, on
the one hand, covered over 80% of all housing needs. The formal system, on the other
hand, had covered only the remaining 20%. This latter system, which is often heavily subsi-
dised—through subsidised low interest in mortgage system-, provides housing for the mod-
erate to high-income people.
The works of Turner (1976) on the self-help housing and the works of Koenigsberger
(1964) in urban development planning have undoubtedly influenced the concepts for hous-
ing development and housing policy in Indonesia (Winarso 1999, 2002; 2006); the Govern-
ment of Indonesia has since 1974 adopted two policy tools to address housing shortages.
The first policy is the direct intervention by providing housing through development of
new houses by Housing Development Corporation (Pembangunan Perumahan Nasional
– Perumnas) and by the Ministry of Peoples’ Housing and Ministry of Public Works.5 Both
ministries were developing low-cost multi-stories housing for the poor. The second policy
is the indirect intervention by encouraging the people to build or upgrade their own houses
through programs like Kampung Improvement Program (KIP) and mortgage finance by
State Saving Bank (Bank Tabungan Negara—BTN), the commercial banks, the Secondary
Mortgage Facility and Slum Upgrading Facilities. Another indirect policy instrument for
ensuring the provision of low-income housing is by setting a requirement to have a ratio
of 6 small houses and 3 medium houses for every large or luxury house built by a pri-
vate developer, on a policy known as 1:3:6 ratios (SKB No.: 648–384 of 1992, No.: 739/
Kpts/1992, No.: 09/Kpts/1992). For unclear reasons, this policy was later in 2012 revoked
and changed into 1:2:3 proportion (Ministry of Housing Regulation No. 10 of 2012,
amended by No. 07 of 2013).
There was no formal definition of slum until 2011, when the government enacted a law
on Housing and Settlement (Law No 1 of 2011). The law stated that slum is uninhabit-
able settlements characterised by irregularity of buildings, high building density levels and
quality of buildings and facilities and infrastructure that do not meet the requirements. So
far, slum upgrading in Indonesia has been trying to solve part of the problem by focus-
ing on one or more slums problems, i.e.: infrastructure drainage and sanitation; individual
housing improvement, it has never been in the shape of amore comprehensive upgrading.
According to the Law, no 1 of 2011, improvement of slum condition can be carried out
through restoration, renewal, or resettlement.
The slum upgrading policies in Indonesia since its independence, by far, are influenced
by the international thinking on slum eradication as it can be seen in the policies of donor
agencies such as the World Bank (WB) and Asian Development Bank (ADB). As they
provide financial assistance for slums improvement programs in Indonesia, they pass on
their own concepts of slum upgrading. Table 4 below shows the association between Inter-
national and Indonesian policies in slum eradication programs.

4
  The type of simple house is defined by the Government. According to the Ministry of Finance regula-
tion, a simple house is a 36 square meter house constructed on 60 square meter plot. This type of house
is exempted from Government’s tax and the price the house each year is determined by the ministry of
Finance as the following: (in Java except Jakarta, Bogor, Depok, Tangerang and Bekasi) 2014: IDR 105
Million, 2015: IDR 110,5 Million, 2016: IDR 116,5 Million, 2017: IDR: 123 Million, 2018: IDR 130 Mil-
lion; 140 Million, 2019 (Nomor 81/PMK.010/2019).
5
  These Ministries in 2014 were merged into one Ministry labeled the Ministry of Public Works and Hous-
ing.

13
Slum-upgrading trough physical or socio-economic improvement?…

The first KIP was the Mohamad Husni Thamrin project in Jakarta in 1968. The pro-
ject focused on improving the physical condition of slum areas. KIP is a success story and
became a model for slum improvement; however, it was later realised that KIP had not
eradicated poverty (see Werlin 1999).
Influenced by a new approach in slum/squatter improvement, a more comprehensive
and integrated approach was developed under the regime of urban management. A Tribina
concept was created as an integration of physical, social and economic improvement. The
World Bank assisted several slum improvements projects across Indonesia using this com-
prehensive approach, such as KIP comprehensive in Surabaya, Samarinda, Balikpapan and
other Java cities.
Critics to the first generation of KIPs say that KIP lacked community participation, a
missing approach in implementing the housing programs (ASPEK et  al. 1999). In Sura-
baya, however, the KIP implementation and some upgrading projects after KIP, including
urban renewal in the mid-’70 s, were already based on a partnership between the local gov-
ernment, an NGO, university staff, students and the community (Silas 1997).
Learning from these lessons and influenced by the world’s then known approach of
urban management agenda, later in 1984, the government addressed the lack of community
participation through the Ministry of Social Affairs’ self-help program for housing settle-
ment (Winayati et al. 2004). Community participation in housing then was stipulated into
law in 1992, i.e. Law no. 4/1992 for Housing and Human Settlements. (This law was later
repealed by Law no. 1 of 2011 concerning Housing and Settlement).
In urban areas, the second generation of slum upgrading was initiated by encouraging
a participatory approach in all projects. This was even strongly advised when the country
experienced an economic crisis at the end of 1997. As it was presented in a report (Winarso
et al. 2002), the number of poor people in the country was suddenly increasing6; the severe
economic crisis since mid-1997 had caused an apparent deterioration in the people’s wel-
fare. The number of people living in poverty had risen dramatically. In December 1998, the
number of poor people (living in the urban and rural area) reached 49.5 million (24.23%
of the total population), or 27 million more than the pre-crisis figure. This increase was
reached only within 18 months. The impact of the crisis on poverty in the urban area was
more severe than in rural area. From 1996–1998 urban poverty increased by 8 million peo-
ple (83%) and about 7 million people in rural areas (28%).
In urban areas, new programs were introduced to mainly deal with the sudden increase
of poverty, i.e. Social Safety-Net (Jaring Pengaman Sosial – JPS) and Urban Poverty Alle-
viation Program (Program Pengentasan Kemiskinan Perkotaan – P2KP) which basically
are the third generation of slum upgrading programs. These programs envisaged the inte-
gration of social, economic and physical improvements in slums areas in the Tribina Con-
cept (three-fold improvement concept). The goal is to encourage slum dwellers to be more
productive, thus improving their social-economic condition. This strategy was formally
stated in the National Medium-Term Development Plan 2004–2009 as: "Improving access
to basic infrastructures and social amenities for the poor as well as to the capital resources

6
  During 1976 and 1997, Indonesia experienced a decreased level of poverty. In 1976, the number of poor
people was 54.2 million (or 40.08% of total population). The number decreased drastically to about 22.5
million (11.34%) in 1996 and was estimated to be only 21.5 million in 1997. This was reflected by the
improvement in social indicators such as health and education. The relatively stable economic growth dur-
ing the last two decades was believed to have given a positive impact on the improvement of social and
economic welfare.

13
 Table 4  Comparison of international and indonesian policies on slum eradication programs and slum upgrading projects in bandung
Year International Policies and approaches Indonesian Policies/ Note
(Bandung Projects)

13
Pre -Independence Housing Act of 1907 in the Netherlands and Kampong verbeteering Formalized by Kampong Verbeteering Ordo-
awareness of physical improvement in natie 1934
Europe
1968 Muhammad Husni Thamrin program KIP was initiated in Jakarta, named Muham- 1st Generation
mad Husni Thamrin Program, focused on
Physical Improvement
1974-1980s Vancouver Declaration influenced by the KIP Financial assistance from World Bank. By
thinking of Turner on Self Help Housing; (Bandung: UNEP experiment) 1979, 2500 Kampung had been improved
World Bank’s program, Extended to other cities
Site and services KIP in Surabaya named WR Supratman
Project
Government provided land and housing for
the poor
1981–1990 Urban Development Regime; Global Shelter P3KT Financial assistance from World Bank:
Strategies for 2000 Housing and Settlement Improvement Focus on physical development and urban
“Urban Management Agenda” (Bandung: BUDP I) management
“Structural Adjustment” (Bandung: BUDP II)
1992–1998 Market led development urged the govern- P2BPK Law no 2 of 1992 regarding Housing and 2nd Generation
ment to shift from “provider” to “enabler” KIP Comprehensive; “tribina” Concept Settlements
of housing for the poor, (Bandung PLPKP2) Minimal involvement from the government
“Holistic” approach in development
H. Winarso
 Table 4  (continued)
Year International Policies and approaches Indonesian Policies/ Note
(Bandung Projects)

1998–2004 Global Economic crisis- introduction of Social Security Net program JPS Economic crisis hit Indonesia severely. Politi- 3rd Generation
Revolving Fund as a way for Social Security P2KP cal turmoil, new government administration
Net National Movement on One Million Introduction of Self Help Community Organi-
House and sation (BKM) and Self Help Community
RSS Group (KSM)
CoBild Tribina Concept (Tree fold improvement
NUSSP (Neighbourhood Upgrading and concept): social improvement, economy
Shelter Sector Project) improvement and physical and environment
SSPAP (Squatter Settlements Pilot improvement
Assistance program)
(Bandung: P2KP as part of JPS)
2004–2010 Millennium Development Goal; Goal 7 target Affordable Vertical Housing PNPM is a continuation of P2KP. This
11: to achieve significant improvement of PNPM program is not directly touching housing
the live of slum dwellers, (Bandung PNPM projects) improvement
2010–2014 Sustainable Development Goal Regional Based Slum Upgrading Enactment of Law no 1 of 2011 regarding
NUSSP Housing and Settlements
Slum-upgrading trough physical or socio-economic improvement?…

SAPOLA Transformation from Tribina concept into

Tridaya concept
2015- 2019 the New Urban Agenda PPMK
KOTAKU

Note: for abbreviation see appendix 1

13
 H. Winarso

in particular to support micro, small and medium economic productive activities" (Govern-
ment of the Republic of Indonesia 2004). This Tribina concept was viewed as a top-down
approach while the community was seen as an object for development. The government
then transformed the Tribina approach into Tridaya concept (three-fold empowerment con-
cept) in which the community is positioned as subject; the government empowered the
community to improve their own economy, social cohesiveness and housing. Education in
term of courses was important in this concept.
The government’s latest program, introduced in 2016, is an Urban Slum Management
Program called Kotaku (which means "My City"). The program aims to eliminate slums
in urban areas (Technical Guidelines for the Urban Slum Management Program (Kotaku)
2016). It aims to build an integrated system for slum management by increasing access to
infrastructure and basic community services in urban slums. Local governments have to
lead and collaborate with stakeholders in its planning and implementation and have to pri-
oritise community participation.
The slums upgrading efforts in Indonesia can be divided into three generations. The first
generation was upgrading which focused on physical aspects. The second generation was
upgrading which allowed for the social process, such as participatory planning and devel-
opment. The third generation was the upgrading approach which gave attention to the peo-
ple’s livelihood and was considered as an integrated approach as envisaged by some donor
agencies. This third generation tries to empower the community so that the community,
with their own capacity, would improve theireconomy, social cohesiveness and housing
condition. The latest implemented program in this generation is Kotaku program:

4.2 Slum upgrading programs and communities’ productive assets

Since 1978, Bandung has accomplished several slum upgrading projects. The first was
UNEP-UNDP) experiments (known as UNEP Experiments). This program was not directly
aimed at slum upgrading but was an experiment that focused more on improving sanita-
tion and waste disposal management. This was then followed by other upgrading projects
initiated by the central government i.e. BUDP I and II; Urban Renewal and Housing Devel-
opment Program (Peremajaan Lingkungan Perumahan Kota dan Pengembangan Permuki-
man—PLPKP2) in Industri Dalam (1990); and P2KP as part of JPS Program (1999–2008).
In 2003, with assistance from the ADB, the government also introduced a program called
Neighbourhood Upgrading and Shelter Sector Project (NUSSP).
In 2007, the government launched a Community-Based Settlement Upgrading (Pena-
taan Lingkungan Permukiman Berbasis Komunitas—PLPBK). PLPBK is a sectoral pro-
gram for environmental management. In Kelurahan Sadang Serang the program was
focused on road improvement for disaster mitigation along a river. PLPBK also empha-
sises participation in environmental management. Together with PLPBK, in 2007, the
Government also introduced the Community Based Livelihood Improvement Program
(Program Peningkatan Penghidupan Masyarakat Berbasis Komunitas—PPMK). PPMK
assists small business development through revolving funds. Later in 2011, the government
launched Programme for Community Empowerment (Program Nasional Permberdayaan
Masyarakat – PNPM) projects. Environmental assets are one of the focus of activities in
PNPM.
For this study, only areas of slum upgrading that had been accomplished for more than
five years by 2011 were chosen as the case study areas. These areas are the following: (see
Fig. 1).

13
 Table 5  Slum upgrading program in Bandung
Initial Program Location (Kelurahan) Continuation Program Activities focus

UNEP (1978–1980) Cikutra BUDP II Adding and repairing sanitation facilities

P2KP Setting up cooperatives and providing revolving
funds
PNPM Repairing of roads/pathways and water pipes in all
P2KKP RWs

KOTAKU
BUDP I (1981–1986) Padasuka P2KP Setting up cooperatives and providing revolving
funds
PNPM River normalization, drainage system improvement
and street lighting
P2KKP Gate construction and park improvement
KOTAKU Construction of temporary garbage disposal system
BUDP II (1986–1989) Pajajaran P2KP Strengthening cooperatives and improving local
pathways/streets
PNPM Bridge and gate repairing
KOTAKU Local street and drainage system improvement
Warung Muncang P2KP Providing revolving fund and drainage system
improvement
Slum-upgrading trough physical or socio-economic improvement?…

PNPM Local street improvement

KOTAKU Street and drainage system improvement
PLPKP2 (1990) Arjuna PNPM Street improvement
KOTAKU River dyke improvement

P2KP (1999–2008) Sadang Serang PLPBK Improvement of street along river

P2KKP Construction of sewage disposal system

KOTAKU Street and bridge improvement

PPMK Providing revolving fund

PNPM (2011) Jatisari KOTAKU Construction of waste disposal system

Note: For abbreviations see appendix 1

13
 H. Winarso

Fig. 2  Condition of productive NA
asset in 2019. Note: NA: Natural 3
Asset; PA: Physical Asset; EA:
Economic Asset; HCA: Human 2
Capital Asset; SCA: Social
Capital Asset SCA 1 PA
0

HCA EA

UNEP BUDP I BUDP II

PLPKP2 P2KP PLPBK
PPMK PNPM

1. UNEP- Experiment (1978–1980), in Kelurahan Cikutra

2. BUDP I (1981–1986), in Kelurahan Padasuka
3. BUDP II (1986–1989); in Kelurahan Padasuka
4. PLPKP2 in Industri Dalam (1990), in Kelurahan Arjuna
5. P2KP as part of JPS Program (1999–2008) in Kelurahan Situsaeur
6. PLPBK (2007) in Kelurahan Sedang Serang
7. PPMK (2008) in Kelurahan sedang Serang
8. PNPM (2011) in Kelurahan Jatisasri

One Kelurahan can have several programs, one after another. The program can be
implemented in one site as a continuation of the previous program, but new programs were
mostly implemented in new sites although in the same Kelurahan. Table 3 above shows the
program in each Kelurahan surveyed. The interviews and the field observation are summa-
rised and presented in the web diagram in Fig. 2 below.
Looking at the improved communities’ productive-assets, the improvement projects can
be grouped into three i.e.: (1) Projects that focused primarily on the physical development
(one asset) and had a tiny portion of the budget (less than 10%) for social development; this
included BUDP I and II; (2) Projects that focused on both physical and social development
plus a small portion of economic development (two or three assets); this was P2BPK; and
(3) projects that were intended to improve three assets i.e. physical, social and economic
assets; these were PLPKP2 and P2KP. A general description of the programs is presented
in Table 5
An evaluation conducted shortly after the slum upgrading projects, as shown in some
reports (e.g. WHC 1980; Directorate General of Housing and Human Settlement, 1982),
always indicated that the projects positively impacted the community. However, it also
showed that the impact was not as high as expected, which certainly casts doubt on the
approach (see, for instance, Werlin 1999). Moreover, the effect on the community five
years’ after the project completion remains unclear.
Based on the available reports, it can be recognised that only P2KP is designed to build
almost all of the communities’ productive assets. In contrast, UNEP-Experiment (1978-
1980) and PLPKP2 (1990) are intended to build only physical assets and economic assets.
The comparison between the communities’ productive assets as referred to in the program

13
Slum-upgrading trough physical or socio-economic improvement?…

concept at the time of project implementation and the condition of these assets more than
five years of after the project completion (in 2019), shows that, except for physical assets,
there are only few other assets, if any, are still visible.
Table 6 below summarised the comparison; Figs. 3 and 4 showing the physical asset in
BUDP I and II and in P2KP projects that are still in existence.
The improved natural assets in this case are the construction of dykes along the rivers.
Because the construction was done by skilled labours and was well monitored, these dykes
were still in existence in 2019. Meanwhile the association of the improved economic assets
in Situsauer (e.g. the cooperative as observed in 2007 and in early 2015 and 2019) with the
project remains to be proven. The following Table  6 shows the communities productive
assets during the program and in 2019.
Some projects did not take the improvement of human capital assets (BUDP I and II
and PLPKP2) into consideration in their concept, but in the implementation, the project
had to deal with these assets to be able to get support from the community, i.e. by giving
short training or information on the project. As they were only "made-up" by these human
capital assets, improvements did not last longer and later disappeared. The human capital
and social capital assets were no longer in existence five years after the project had been
completed, mostly due to the community’s perception that all social activities were being
done only during the project cycle. Moreover, for the poor whose income is based on day-
to-day earning activities, getting involved in organisations or attending coordination meet-
ings were almost impossible unless they were paid to come to the meetings.
Unlike KIP, the first generation of slum upgrading in Indonesia that focused on physi-
cal improvement, UNEP-Experiment tried to include social and economic activities. This
experiment was designed based on the view that slums upgrading would succeed if it could
also reduce poverty at the same time (Regional Housing Centre et al. 1979). It means that
the orientation of upgrading activity was not solely on improving the physical conditions;
therefore, in its implementation, the UNEP-Experiment promoted the building of social
assets in the community while at the same time improving the economics assets through
the establishment of a general cooperative (Koperasi Serba Usaha – KSU).At the imple-
mentation stage, the activities to provide sanitary services and other services were carried
out with active involvement of its community and taking advantage of the existence of
KSU (Regional Housing Centre et al. 1979; WHC 1980).
Integrated activities in UNEP-Experiment can be seen, for instance, in the construction
of septic tank. The septic tank was built in conjunction with training for its construction or
training from health teams on solid waste management and socialisation of toilet usage. It
shows that the slum upgrading which was dominated by physical activity, was carried out
in integration with social and economic activities. The integration gave a real contribu-
tion to the communities’ productive assets; the physical asset, natural asset, human capital
asset, social asset and economics asset.
Interestingly, the evaluation report (WHC 1980) noted that the village leaders and elders
(Head of the village, LKMD, RWs RTs leaders7) were very instrumental in influencing the
program’s success, especially in motivating the community to participate in UNEP-activ-
ities and in designing the program. This program’s experience, which shows the impor-
tance of motivators for the success of slum upgrading, gave valuable input for the next
slum upgrading program.

7
 LKMD= Lembaga Ketahanan Masyarakat Desa (Community Resilience Organization); RW= Rukun
Warga (Neighborhood Community Organization- consisting of 5 to 10 RT); RT= Rukun Tetangga (House-
holds Groups - consisting of 10–15 households).

13
 H. Winarso

Fig. 3  The physical asset, BUDP I and II Kelurahan Padasuka

Fig. 4  The physical asset, P2KP Kelurahan Situsauer

This approach was replicated in the third generation of slum upgrading PLPKP2 and
P2KP by allocating special funds for economic and social empowerment (Directorate
General of Housing and Human Settlement. 2002). In a PLPKP2 program conducted in
Industri Dalam in 1990, the approach used was Tribina (where the improvements covered
the social, economy and built environment aspects) through physical transformation activi-
ties. However, community participation activities were not carried out (Winarso 1999).
The slums were demolished and four four-storey walk-up apartments were erected. The
slum community was then rehoused into the new walk-up flats. Attempts to involve the
community were only done after the planning stage (during the implementation stage) by
involving the community in an organisation called BP4K (Badan Pelaksana Penataan dan

13
Slum-upgrading trough physical or socio-economic improvement?…

Pembangunan Permukiman Kumuh—Slum Area Planning and Development Implement-

ing Board). The members of this organisation were representatives from the government
and community. However, the community’s role in the organisation was not clear (Winarso
1999).
This project could be considered a failure. In 2007 most of the dwellers were new;only
few occupants were the original slum dwellers of the time of upgrading; and it was not
clear where those original slum dwellers had moved to. While the physical conditions had
been improved, the social and human capital assets had undoubtedly not been improved.
P2KP accommodated the "Community Productive Assets’ approach in its program con-
cept (Directorate General of Housing and Human Settlements. 2002b), but not in its imple-
mentation. P2KP, in short term, had successfully built the physical asset and economic
asset, but not the social and human capital assets.
The allocation of special funds, which was meant to be revolving funds and their com-
plete manual to be executed in the program were aimed at developing the communities’
productive assets to create self-supporting communities. It was hoped that it would create
a resilient community in the long run, which would minimise community’s vulnerability to
the political and economic changes.
To manage these special funds, the government set up new voluntary community organisa-
tions called BKM (Badan Keswadayaan Masyarakat- Community Self-help Organisation) as
the umbrella organisation of KSM (Kelompok Swadaya Masyarakat – Community Self-help
Groups). The government also establish Self-help Groups at Kecamatan and Kelurahan levels
(Directorate General of Housing and Human Settlement. 2002b).
However, BKM and KSM, the two ad hoc institutions set up to help and improve the com-
munity’s social assets, were apparently too dependent on the availability of the government’s
special funds. BKM and KSM no longer had any activities after P2KP funds were completely
distributed to the community. Moreover, these ad hoc institutions had no direct connection
with the statutory institutions.
A field study in 2007 shows that only less than 30% of the BKM at Kelurahaan surveyed
were still in existence. In Kelurahan Situsaeur, only one official member of BKM still worked
i.e. the Chief of Financial Section (one of three sections in BKM). He was still involved in
BKM because of his responsibility in managing the revolving funds. This condition indicated
that the long-term impact of assets building had not been achieved. In 2019 this BKM had
ceased to exist.
The community’s capability to maintain the result of self-supporting construction was also
not created: the community refused to financially contribute to repair a damaged physical asset
because they were still having economic difficulties. Moreover, the distribution of P2KP funds
was commonly seen as a donation and it was in public opinion that similar funds would be
distributed again. This perception affected the level of ownership of the program.

5 Conclusion

Slums upgrading programs carried out in Bandung since the 1970s until 2015s have given
some valuable lessons as inputs in designing sustainable upgrading program.
As discussed, there are three generations of slum upgrading experienced in Indonesia. The
first generation of slum upgrading focused on physical aspects as seen in KIP Projects. The
second generation introduced social processes in slum upgrading such as participatory plan-
ning and development. The third generation gave attention to livelihood and considered an

13
 H. Winarso

Table 6  communities productive assets during the program and in 2019

Tahun Program Sustainable Urban Livelihood Assets During Sustainable Urban Livelihood Assets In
the program 2019
NA PA EA HCA SCA NA PA EA HCA SCA

1978 UNEP √ √ √
1981 BUDP I √ √ √ √ √
1986 BUDP II√ √ √ √ √
1990 PLPKP2 √ √ √ √ √
1999 P2KP √ √ √ √ √ *√
2007 PLPBK √ √ √ √ √
2008 PPMK √ √ √
2011 PNPM √ √ √ √ √ √
Note: NA: Natural Asset; PA: Physical Asset; EA: Economic Asset; HCA: Human Capital Asset; SCA:
Social Capital Asset

integrated approach; trying to empower the community to improve the economy, social cohe-
siveness and housing condition with their capacity.
In Bandung, the first generation of slum upgrading, which focused more on physical
improvements and less on community participatory like BUDP I and II (after KIP concept),
has improved the physical and social conditions in the area. This was perhaps due to the pro-
ject’s ability to maintain the construction quality as the result of the availability of sufficient
funds. On the contrary, in the second and third generations of slum upgrading, the funds had
to be shared for social activities, i.e., participatory approach and economic improvement. Fur-
thermore, in most of the second and third-generation projects, the participatory process was
seen as an end in itself, not as a means to the poor’s social-economic improvements.

5.1 Lessons learned

5.1.1 The importance of physical assets

Physical asset includes housing condition, infrastructure such as sanitation (clean water
and waste); circulation system (road and pedestrian ways), drainage, electricity system,
education and health facilities as well as public spaces. These physical assets were included
in the components that should be improved in all projects; however, compared to the other
generations, the first generation of slum upgrading (the BUDP) had the most significant
impact on the community.
This first generation of slum upgrading in Bandung did not have a participatory compo-
nent which means that all funding was allocated solely for physical construction. The first
generation of slum upgrading projects employed skilled labour, whilst the second and third
generation, in their endeavour to give more emphasis on community participation, used the
local community to improve the physical condition of the slum. This had made the quality
of the physical improvements inferior than if they had been constructed by skilled labour.
The UNEP Experience, although it was executed during the first generation, had tried
to work with the community. UNEP showed a good example of a participatory approach in
developing and improving physical assets by communicating the plan and the construction

13
Slum-upgrading trough physical or socio-economic improvement?…

to the community. UNEP Experience showed the use of participatory approach through
KSU as an end; however, after some years (in 2008) the cooperative and the physical
improvements (e.g. sanitation) had ceased to exist.
Community participatory approach should not be seen as an end so that not every activ-
ity has to be carried out by the community. Physical improvement needs to be performed
by paid and trained skilled labour, not the unskilled community.

5.1.2 Inept improvement of human capital and social assets

Improvement of human capital is essential to support community self-confidence and is

expected to increase community productivity. The human capital improvement includes
education, health and community willingness to be actively involved in organisations and
build social relationships within the community. In the execution of upgrading projects in
Bandung, only the third generations (PLPKP2) had those components by providing rooms
for community gathering, which were then used as a place for kindergarten and seminars
on public health and sanitation.
As aforementioned, the field study in 2007 found that most of the occupants of the four
four-story walk-up apartments in PLPKP2 project were not the original slum dwellers.
Even though the kindergarten was still in existence, no more seminars and other educa-
tional meetings had been done since the project finished. The human and social capital
improvements were certainly not achieved since the walk-up apartment occupants were not
the original slum dwellers. What was happening there was gentrification in the negative
sense (Winarso 1999). This condition remained the same in 2019.
Human capital and social assets have to be improved and maintained for a considerable
time; this cannot be carried out only in one cycle of the project, which usually only lasts for
two to three years. It seems that adding more funding for this in one project cycle will not
have a significant impact in a longer time. Improvement of these assets will last longer and
substantially affect the livelihood better if the project can create a system within the exist-
ing RT or RW, not an ad hoc institution, which can work as the ad hoc institution created
for the projects i.e. the BKM and the KSM.

5.1.3 
The short‑sighted improvement of ad hoc community institutions

Economic assets are essential in facilitating the poor’s access to capital. The idea is to
improve the security of tenure. Legalisation assets such as housing and land ownership
certificates can also be used as community access to capital. Security of tenure from the
poor community can also be used as capital to start a small food stall (warung) or to make
home-made food, thus improving their economic productivity.
In many cases, the projects could not improve the economic assets due to the cumber-
some process of land ownership application. BKM and KSM, the ad hoc community insti-
tutions that were set up as a way for maintaining the social cohesiveness and developing
economic productivity of the community, were ended when the project finished. The rea-
son was that most of the BKM officials saw community productive asset improvement only
as a project and not as a way to improve the overall economic productivity.
In the PLPKP2 project, the third generation of upgrading, the security of tenure that was
supposed to be improved when the squatters accepted to live in the walk-up apartments
was not achieved due to the unclear process and unclear responsibilities of the community
institutions (Winarso 1999).

13
 H. Winarso

Unlike the second and the third generation of slum upgrading, which was helped by the
improved physical condition, the first generation upgrading improved access to and from
the settlement. This, in turn, affected the price of their economic assets and the opportuni-
ties for productive economic activities with no help from any ad hoc institutions, using the
statutory institutions such as RT and RW instead.

5.2 Policy implication

Slum upgrading program is one of the policies to reduce poverty in urban area by facili-
tating infrastructure and basic services. Physical improvement approach was used based
on John Turner’s argument. He argued that after the improvement program, dwellers in
slum areas would get involved and have a sense of responsibility to maintain the improve-
ment that contributes to increasing the economic condition. In Bandung case, several slum
upgrading programs had been successful in improving the physical conditions, but there
was no direct association with poverty reduction.
Evaluation for those policies shows that the settlement and infrastructure sector basi-
cally contributes in improving livelihoods but do not directly generate income for slum
dwellers. It, however, reduces poverty by increasing slum dweller’s productivity and sav-
ing due to the reduced cost for basic necessities. The additional money expected from the
improvements can be used for fulfilling daily needs, cost recovery and maintenance of
infrastructure and basic services.
As an overall conclusion, slum upgrading program can have a better impact on the com-
munity and poverty alleviation if:

• Slum upgrading program is seen as an effort to increase community productivity and

saving, as an integral part of poverty alleviation policy;
• High quality of physical improvement is maintained; Physical components such as
basic infrastructures are important in slum upgrading. They are tangible and can be
directly used by the community; if the infrastructure is improved with a high-level qual-
ity and can last longer, the accessibility of the area will improve accordingly, encourag-
ing further investment or other economic activities;
• Slum upgrading program is designed by adopting local needs and considering the dif-
ference between each slum characteristic to solve the real problems in the slum area and
give a long-term contribution to reduce and even alleviate poverty.

Acknowledgements  The study is partially funded by the Indonesian Ministry of Research, Technology and
Higher Education under World Class University (WCU) Program managed by Institut Teknologi Bandung
2019 and DIKTI research grant 2016; The authors would like to thank: Dr Tetty Armiaty Argo and Prof
Tommy Firman for their valuable discussions. The authors are grateful to Irina Siregar, Eva Diana Rilva,
Eka Diana Septi, Rayi Renggani and Ruth Anna Tampubolon who provided some of the information and did
the field survey in 2007 and A. Gunawan who did field observation, interview and provide photos in 2015
and Prima Dea who did the research and re-interview in 2019. A special thank you is due to Ami Arnscheidt
and Arum Larasati Winarso for carefully reading through the draft of the manuscript.

13
Slum-upgrading trough physical or socio-economic improvement?…

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