The new capital of Indonesia will be called Nusantara and will be located on the island of Borneo.
The project of moving the capital from congested Jakarta to another part of the archipelago had resonated in the speech of several of the country's presidents for decades and, as of today, it is closer to becoming a reality.
The Indonesian Parliament has passed a law to move the nation's capital from Jakarta on the island of Java to a jungle area of Kalimantan on Borneo, an island Indonesia shares with Malaysia and Brunei.
The new law approved on Tuesday provides a legal framework for President Joko Widodo's ambitious multi-million dollar project - valued at some 466 billion rupees (28.4 billion euros) - and stipulates how the development of the capital will be directed and financed. The new capital city, located more than 1,000 kilometers east of Jakarta, has been conceived as a low-carbon territory, which will support the pharmaceutical, medical and technological sectors and promote sustainable growth beyond the island of Java, the most populated of the 17,000 that make up the archipelago.
"The new capital will have a centralizing function and will be a symbol of the nation's identity, as well as a new economic super center of gravity," Planning Minister Suharso Monoarfa said after the law was passed. Although the administrative functions of the nation will be transferred to the new Nusantara, analysts believe that Jakarta will continue to be the financial and commercial center of the country and that the majority of its almost 10 million inhabitants will continue to live there.
Last August, Widodo announced that the State will assume 19% of the cost of construction of the new capital ―about 400 square kilometers, less than the total area of Madrid―, while the rest will be financed through public-private projects and private investment. The initial budget includes the construction of new government offices, as well as residences for around one and a half million civil servants who will have to relocate to Nusantara. Exceeded the instance of Parliament, it is expected that the works begin throughout this year. The Government, for its part, aspires to transfer its workers by 2024.
The pandemic caused Widodo to be forced to park the implementation of this plan that he announced in 2019 until now. On Monday, during a ceremony to commemorate the anniversary of the Parahyangan Catholic University in Bandung, Jokowi, as the Indonesian president is popularly known, assured that the project of a new capital will not be a mere transfer of government offices.
“The main objective is to build an intelligent city, an internationally competitive city, which is the new locomotive that transforms our country. It will be the starting point for an Indonesia based on the green economy, through innovation and technology,” the president added. The chosen name, Nusantara, is an old Javanese term meaning “outer islands” and by which the Indonesian archipelago is generally known in the local language.
Jokowi says the relocation is done to tackle the nation's inequality problem and relieve congestion in Jakarta and the island on which it is located. Java is home to 60% of the country's population and more than half of all Indonesia's economic activity takes place there. The Kalimantan region, meanwhile, is almost four times larger, but hosts less than a tenth of the GDP. Its location is also more central than that of the current capital.
Jakarta also faces urgent environmental challenges. The city is often ranked among the most polluted in the world. In September 2021, a Jakarta court found the government guilty of negligent practices for poor air quality caused by the millions of motorcycles that daily occupy its streets and power plants located in the neighboring provinces of Banten and West Java. Experts estimate that air pollution causes 5.5 million people to fall ill each year in the region.
In addition, areas of North Jakarta are sinking at a rate of 25 centimeters a year. The city does not channel enough drinking water and locals rely heavily on wells that they use to draw water from shallow aquifers, causing the land above the surface to sink.
The Widodo project, however, also has its detractors who consider that the approval of the law has been hasty and that the decision has been made after little public consultation and environmental experts. Kalimantan is one of the few places in the world where orangutans live in their natural habitat and, despite the fact that the Ministry of Planning reiterates that the construction of this new city will not alter the protected forests, there is a fear that with the increase in the number of residents in Borneo the rain forests characteristic of the region suffer a negative impact.
Nusantara joins a small list of cities that have assumed that political-administrative responsibility at the national level.
In 1960, Brasilia replaced Rio de Janeiro as the Brazilian capital and in 2005 Naypyidaw replaced Rangoon in Myanmar.
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