President Joko Widodo and Vice President Jusuf Kalla - Photo: Secretary Cabinet.

JAKARTA (TheInsiderStories) – Indonesia is all but certain to move its capital city from Jakarta, with President Joko Widodo already ordered ministers to formulate various financing plans for the move that cost Rp466 trillion (US$32.41 billion). Besides using the 2020′ state budget, the government plans to sell several state assets and invite foreign investors.

“The potential is very rough. We are mapping potential assets in Medan Merdeka, Kuningan, Sudirman, and Thamrin, with an estimated Rp150 trillion. This can patch up the needs of the state budget. Previously, the state budget needed Rp93 trillion. This means that Rp150 trillion could be used to build a palace, army base, and the need for official housing,” Planning Minister Bambang Brodjonegoro told media after attending a limited meeting at the President’s Office in Jakarta, Tuesday (08/6).

The plan envisages relocating government and its executive branch, ministries and the parliament, the nation’s defense and security authorities, top judiciary and foreign embassies while retaining the central bank as well as trade and investment functions in Jakarta, the minister said.

Speaking to the media today, President Widodo also asked his ministers, besides the financing scheme, to immediately prepare an institution that would be responsible and the legal basis for moving the capital.

“I want to be prepared from now on state and private budget financing schemes, institutional designs provided by the authorities and most importantly the legal basis for the regulation of relocation of this capital city,” the president said. Widodo adds that once plans for the move are finalized, the government can begin building infrastructure at the chosen site for the new capital between 2021-2023, with the goal of starting the move by 2024.

Widodo said, at this time the location of the new capital option had increasingly narrowed. The capital will be moved to Kalimantan. But the president has not said which provinces are among the three provincial capitals in Kalimantan. Widodo himself visited the island in May specifically to survey possible new capital cities and revealed that Balikpapan and Palangkaraya to be among the frontrunners.

“Where is the province? This has to be detailed again. Many choices have been followed up, both in Central Kalimantan, East Kalimantan, South Kalimantan. And later after being presented with details we will immediately decide,” Widodo said.

The President stressed that the chosen location must be based on a study of environmental carrying capacity disasters, socio-political conditions to defense and security. He also asked that the experiences of other countries in moving the capital be studied. What factors become obstacles so that they can be anticipated as early as possible. Instead, the key success factor will be adopted.

That way, the decision taken later is the right decision according to the vision going forward.

“We decided this, I decided later not as head of government but the head of state. We must see the big vision of the next fifth and hundred years in our nation and state,” he said.

The government has long discussed the possibility of moving the nation’s capital to another city in the archipelago, which could potentially help solve many of Jakarta’s most pressing urban problems (traffic, pollution, overpopulation, others) as well as lead to more balanced economic development for the country if the capital was moved outside of Java.

The greater Jakarta area is already home to 30 million people, with the traffic congestion estimated to cost Rp100 trillion a year in lost productivity. Widodo cited Malaysia, South Korea, Brazil, and Australia as examples where the nation’s development had been a factor in deciding the location of the capital, and in some cases had prompted a move.

The idea to relocate the capital was first proposed by the country’s founding father, President Soekarno, who suggested that the central government’s base of operations be moved to Palangkaraya in 1957. President Widodo’s government was the latest administration to revive the idea, first publicly announcing relocation plans in 2017.


Written by Lexy Nantu, Email: