capital city

Is Jakarta Set To Lose Capital City Title In 2018?

Rumours of plans to move Indonesia’s capital city from Jakarta to another city in Java or even another region have long swirled, but are the recent rumblings different? With even President Joko ‘Jokowi’ Widodo weighing in lately, it’s timely to consider the possibility.

Jakarta has developed into a business and financial centre of Southeast Asia, as well as the hub of central government but a move is justified by an increase in decentralisation and focus on developing infrastructure outside of Java and Sumatra.

Those in favour of moving the country’s central government and administrative arm cite Jakarta’s world-famous traffic congestion, which is estimated to cost around Rp.150 trillion (US$11.2 billion) annually in lost productivity and related costs, as well as heavy pollution and overpopulation.

But, those against the move note the high costs of relocating, as well as job losses in Jakarta and upheaval for the government with the move expected to take several years before being finalised.

Business leaders in particular are unimpressed with a potential move.

“A transfer to Palangka Raya will increase the burden of cost and time and will reduce competitiveness of investment and business,” Sarman Simajorang, Vice Head of the Indonesian Chambers of Commerce, said in April after Central Kalimantan city Palangka Raya was tipped as a potential new location.

Palangka Raya has been a favourite since founding president Sukarno voiced his support during his presidency in the 1950s.

“Palangka Raya is located right in the middle of Indonesia and because of that has become a popular candidate,” Sukarno biographer Wijanarka told BBC Indonesia on Tuesday, July 4.

Wijanarka added that the plan would have come to fruition under Sukarno, but the city was accessible only by water at the time due to underdeveloped road infrastructure.

Jokowi confirmed the government is considering transferring to another city, but said he is keeping options open.

“We are looking for alternatives besides Palangka Raya to identify the most suitable one. This is an administrative matter and it is the president who makes the decision,” Minister of Land and Spatial Planning Sofyan Djalil said Tuesday, as reported by state news agency Antara.

Bambang Brodjonegoro, Head of the National Development Agency, said the Agency will lead in realising the plan.

“We need at least three to four years to finalise basic infrastructure as well as governmental buildings,” Brodjonegoro said.

Economy observer Bhima Yudhistira Adhinegara said a transfer to another city would create a much-needed second economic centre for the country, where 40 percent of economic activity is confined to Java.

The central government would need to develop infrastructure, particularly transport, in whichever city it selects which would likely drive down logistics costs, Adhinegara said.

When the idea was first touted in April Vice President Jusuf Kalla appeared to be unconvinced any move was imminent, telling media the plan was at that stage just part of an academic study conducted by the National Planning Agency and noted 800 government employees would have to move.

“Political parties would have to move out. Courts and Supreme Courts would also have to move, aside from the president. Military bases would also have to move. There would be hundreds of thousands who would need housing and offices,” he said from the Vice President’s Office in April.

See: Government Dusts Off Plans To Move Capital To Ease Jakarta Congestion

Image credits: Our Global Trek

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Sharon Hambali is a writer and editor at Content Collision. She covers a variety of issues related to news and business. See her portfolio at sharonhambali.c2live.com and build your own for free! For more information, visit www.contentcollision.co


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