Everyday land speculation without production in state-led urbanization: The case of Indonesia’s new capital city

Abstract

Indonesia’s new capital city construction is inducing state-led urbanization in the absence of private investments. Reports show the impacts of this process as a rapid land price increase and the government’s policy to control it. However, little is known about how the residents in surrounding settlements of the new city have extracted value from this process and the implication of these speculative activities for the state-led urbanization. Critically engaging with the concept of everyday speculation elaborated in Leitner et al. in this journal, and drawing on fieldwork in East Kalimantan during the construction of the city in 2022–2024, we clarify how differentiated land titles, which have been historically established between indigenous populations and transmigrants settled in the area, are working to exclusively benefit transmigrant landowners with strong land claims, while tacitly displacing the indigenous populations. We show how the government’s attempt to control the land prices further benefits the landowners entitled to full compensation. Theoretically, we show that everyday land speculation in the new city takes place without production activities, unlike the cases in Leitner et al. where urban residents extract values from spatiotemporal rent gaps produced through the livelihood activities or new rental unit construction. We argue that this dynamic ends up benefiting the government, as they also claim land for urban infrastructure development, with political support from the residents with strong land claims, and leads to further marginalization of indigenous populations.