‘The Missing and Forgotten Pieces’ in Indonesia’s New Capital Relocation Planning

The debate over the benefits and drawbacks of Indonesia’s massive plan to relocate the capital city from Jakarta to Borneo is heating up. The Indonesian government has set 2024 as the target year for finishing all official structures or administration systems, public facilities, and preparing Borneo, particularly East Kalimantan, to welcome a large population that will be migrated there. The pros and cons are getting more extreme because the general election to choose country’s leader will be held in that year (2024). Many have accused this relocation of being a last-ditch effort to complete the 2024 political agenda.

Despite the controversy, the president of the Republic of Indonesia announced this ambitious plan in 2019 because Jakarta, the current capital city, is overcrowded, polluted, and has limited land for infrastructure development. Furthermore, the issue of ‘sinking Jakarta’ was a major factor in persuading some scientists and policymakers to support this relocation plan. However, as part of the mega plan, Jakarta will also be established as a business and commercial hub. The relocation of the capital city will, of course, necessitate a massive state budget; an estimated $34 billion will be allocated for the project. Creating a mega-plan to relocate the capital city is not an easy task. According to Gottmann (1983), relocating the capital is not only about the challenges of changing the administration process, but also about the seat of power and a place for decision-making processes that affect the lives and future of the nation ruled, and in the future it may influence trends and developments beyond its borders. Without a doubt, all of these scenarios will require a significant amount of energy, time, and money (Yadav et al, 2019). This relocation will also have an impact on environmental issues, particularly deforestation in Borneo’s forest. A current research by Vuurst and Escobar (2020) and also Romero (2020) mentioned this relocation will result in significant economic growth, but the risk of degradation and biodiversity loss cannot be avoided.

Shifting the development focus from Java (which is always referred to as ‘Java-centric’) to Borneo or specifically East Kalimantan will undoubtedly provide more opportunities for Kalimantan, because currently 65 percent of the national economy is still dominated in Jakarta, which is what causes economic disparities to occur throughout Indonesia. Despite claims by the Indonesian government that relocating capital will boost economic development, a study by the Institute for Development of Economics and Finance found that the new capital city will only add 0.02 percentage point to the country’s economic growth and will only have a short-term economic impact (Katadata, 2019). Furthermore, in the short run, the new capital city will contribute 0.17 percentage points to total investment, 0.02 percentage points to total exports and imports, and 0.05 percentage points to total employment rates. Moreover, the new capital city is expected to boost total short-term output growth in the construction industry by 0.15 percentage points, mineral and steel industries by 0.1 percentage point, and leather and sea transportation industries by about 0.07 percentage points, among other things. As a result, the new capital city, which will be built on a 256,000-hectare (ha) plot of land in East Kalimantan’s North Penajam Paser and Kutai Kartanegara regencies, will impact on inflation rate, and it would most likely rise by nearly 0.1 percentage point in the short term and by 0.04 percentage point in the long term as a result of the capital. Along with this economic valuation and calculation, some environmentalists are skeptical of the promising economic implications because the designated area for future capital is still a forest, and such a connection to integrate economic and environmental concerns in the same line is impossible to make. It also has striking parallels with the current situation in Borneo, where extractive industries and land rights issues are proliferating and causing nonstop conflict. Despite the government’s high hopes for transforming those forests into a new capital city with a smart and green concept, also known as a “forest city,” the current situation in East Kalimantan, where the government is still attempting to boost the oil palm and mining industries, contradicts the concept. If the concept of a forest city is the ultimate goal, then all extractive activities in the main or buffer areas should be halted.

What is missing on the relocation planning?

When a country considers relocating its capital city, extensive research on human interaction, environmental conditions, and other future possibilities must be considered and carried out. Indonesian government must conduct a thorough analysis of the challenges and opportunities for capital relocation before developing a plan and budget for East Kalimantan. Hence, in proposing new capital, there should be a research in demographic and geographical conditions, not only focus on infrastructure and allocating the development budget, because by including a wide range of indicators such as social, ecological, economic, and scientific and technological factors, there will be an anticipation to tackle the long-term consequences for Borneo. It’s because the new capital will experience dynamic growth that is always uncertain and will be confronted with a plethora of complex options.

Lengga Pradipta
Lengga Pradipta
A human ecology researcher in Indonesian Institute of Sciences (LIPI). Having interests on environmental justice, natural resources management and gender issue.