Indonesia State Capital of Jakarta.

JAKARTA (TheInsiderStories) – Indonesian government aimed to move the capital city from Jakarta to strategic areas outside Java or to near-eastern Indonesia, said President Joko Widodo at the limited meeting on Monday 04/29). This is due to the conditions of congestion and floods that continue to hit the capital city of Jakarta today.

The move are estimated need costs up to Rp466 trillion (US$33 billion). He said, the discussion to transfer the capital city should not only consider short-term benefits, but also the interests of the country in its journey to developed the countries in the future.

“When we agreed to go to develope countries, the first question that must be answered is whether in the future Jakarta as the capital city of the country can bear two burdens at once, like the center of government and public services as well as business centers,” he noted.

The President stressed that many countries had thought and anticipated how their country would develop in the future. Therefore, Indonesia needs to think visionary and do the same thinking with other countries.

“I think there are a lot of examples, like Malaysia, South Korea, Brazil, Kazakhstan, etc. Again, we want to think visionary for the progress of this country,” said Widodo.

He understand that the transfer of the capital city requires a long process and huge costs, including the matter of choosing the right location, consideration of geopolitical aspects, geo strategic, and readiness of supporting infrastructure.

In addition, the determination of the new location must be an area free of earthquakes, volcanoes, tsunamis, floods, erosion and forest and peatland fires. The availability of sufficient water resources and free environmental pollution is also considered by the President.

The Minister of National Development Planning Bambang Brodjonegoro estimated that the transfer of the state capital takes around 5-10 years along with thorough preparation including infrastructure development planning.

Therefore, his party proposed that an authority body be formed which is responsible directly to the President. The authority is not only tasked with building government offices in the new capital city, but also oversees the movement of land prices so that they are not controlled by the private sector, so that people can easily get land or decent settlements.

Brodjonegrorostated that there were three alternatives for the transfer of the state capital. First, it remained in Jakarta but the area around the palace and the National Monument was only made specifically for government offices of ministries or institutions to create efficiency in the government’ coordination task.

Second, moving out of Jakarta but still within a radius of approximately 50 to 70 kilometers from Jakarta, such as Putra Jaya in Malaysia.

As known, the population of Java is 57 percent of Indonesia’ population, or around 140-150 million people. The economy of Java contributes 58 percent with high density, but its carrying capacity is also increasingly limited, where many agricultural productive land has shifted to housing and property.

Third, moving outside the island of Java, especially towards the eastern part of Indonesia. Such models have been carried out for example in Brazil, South Korea and Kazakhstan.

He said, following the first scenario, there would be a population of 1.5 million, in which the government would need 5 percent of land, 15 percent of the economy, 20 percent of infrastructure circulation, 40 percent of housing and 20 percent of green open space. So it is estimated that land needs up to or at least 40,000 hectares for estimation or the first scenario.

While with the second scenario where there is resizing from the state apparatus, there will be a migration of 111 thousand state apparatus, plus Police or Army and family members, 184,000 economic actors, a population of 870,000 and less land, 30,000 hectares.

“From there we try to estimate the amount of financing. The estimated amount of financing in which scenario 1 is estimated to cost Rp466 trillion. Scenario 2 is smaller because the city is smaller at Rp323 trillion,” he explained.

According to Brodjonegoro, funding sources can come from four sources such as the State Budget especially for the initial infrastructure, government and parliamentary office facilities, state-owned enterprises for main infrastructure and social facilities, Public-Private Partnerships for several main elements as well as social facilities, and private for residential property development and commercial facilities.

In first scenario, the government portion requires funds of Rp250 trillion, while the private sector is Rp215 trillion. This is the case with the second scenario.

The functions of financial, trade and industry services will still be in Jakarta, for example Bank Indonesia, the Financial Services Authority, the Investment Coordinating Board, as happened in several countries, he added.

Written by Daniel Deha, Email: daniel@theinsiderstories.com