ASEAN Beat | Economy | Society | Southeast Asia

Indonesia’s New Capital Challenge Kicks Off

The announcement on moving the country’s capital is only the beginning of one of the most ambitious infrastructure ventures in its history.

Luke Hunt
Indonesia’s New Capital Challenge Kicks Off
Credit: Flickr/Eduardo M.C.

Late last month, President Joko “Jokowi” Widodo effectively ended years of speculation and months of promises by announcing the area straddling the regions of North Penajam Paser and Kutai Kartanegara in Indonesia’s province of East Kalimantan on Borneo will be the site of Indonesia’s new capital.

Jokowi wants the transition done by 2024, which would time well for the next election and secure his legacy as the Indonesian president who finally delivered on long-promised big-ticket ideas and infrastructure projects, shredding bureaucratic red tape and decades of inertia along the way.

Names for the new capital are being bandied about, more so online. The cheeky have suggested “SaintJokoberg and “Jokograd,” while the more cerebral have suggested “Mandalanusa” which loosely translates as center of the archipelago. Some might also opt for “Nusantaria” the name that denoted much of Southeast Asia when it was little more than sea-faring ports and sultanates dictated by trade winds as opposed to nations-states and sovereign borders.

Whatever the name, the current proposed site location, which straddles the regions of North Penajam Paser and Kutai Kartanegara in Indonesia’s province of East Kalimantan, is being cast as a smart alternative to Jakarta, a capital with its foundations built in a swamp. Scientists expect nearly all of North Jakarta will be submerged — by 2050 by one estimate — and it already boasts one of the world’s worst traffic congestion.

East Kalimantan was mandated given that Indonesia straddles the Pacific Rim of Fire, thereby restricting the possible safe areas for such a location. The area is least prone to earthquakes, tsunamis and floods and sits at the geographical center of more than 17,000 islands, many of them are remote and isolated by a Javanese-centric bureaucracy.

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It was chosen over other locations such as Tanah Bumbu and Palangka Raya – once mooted as an alternative capital by former President Sukarno for various reasons. Logistics is part of this, including existing infrastructure which includes access to seaports and two airports, with at least $33 billion put aside for initial construction.

As of now, based on one count, the government will provide about 20 percent of the outlay with private investment and joint-ventures picking up the majority. Homes for 1.5 million public servants and supporting infrastructure and services are the immediate needs.

Such grandiose plans should fuel a real estate boom, but the government insists it will impose a freeze on land prices in a bid to combat speculators and limit costs.

A bigger issue, however, will be the pristine rainforests that still exist in the area. Designers want the new capital built within the rainforest itself as an ecological showcase of Indonesia at its best.

It’s a nice idea, but the reality is a wildlife habitat will be reduced to little more than window dressing for serious concerns that remain about Indonesia’s environmental record. This risks upsetting environmentalists and scientists and could complicate the government’s planning.

Some in the Javanese clans, and businessmen who like to keep their politicians close, will also be displeased as Jakarta takes the same path as some other Southeast Asian states including Malaysia, where the administration shifted from Kuala Lumpur to Putrajaya, and Myanmar which moved its capital from Yangon to Naypyidaw. But Jokowi is reassuring his detractors, insisting that Jakarta will retain its status as an international hub for trade and finance, and most of the 10 million people who live there.

The extent to which this is the case remains to be seen. While narrowing down the site is a key step in the process, others have yet to be taken including the passage of legislation and other administrative steps that will need to turn this idea into reality. Construction is expected to begin next year, but there will be a long way to go still once Jokowi kickstarts one of the most significant infrastructure projects in the country’s modern history. With Jokowi having tied his legacy to this capital shift, the spotlight will continue to be on his handling of it throughout his second and last term in office as the attention slowly turns towards who his successor will be.

Luke Hunt can be followed on Twitter @lukeanthonyhunt