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Moving the Indonesian capital: Political ambition or realistic vision?

Fulcrum - October 28, 2021

Yanuar Nugroho – Legislation to approve moving the Indonesian capital to East Kalimantan is expected soon. Meticulous planning and execution will be required to avoid huge problems in future.

The plan to move the Indonesian capital from Jakarta to Penajem Passer Utara, East Kalimantan, entered a new phase after the government submitted the presidential letter and the draft of the Capital Bill (RUU IKN) to the House of Representatives (DPR) on 29 September 2021. The Bill consists of 34 articles and 9 chapters outlining the vision for the new capital, its organisational structure and management, along with its development plans. This plan, first decided in a Cabinet meeting on 29 April 2019 and announced to the public in the President's annual state address on 16 August 2019, is estimated to cost at least IDR466 trillion (US$33 billion), 19 per cent of which would be funded from the state budget.

Soon the IKN Bill will be passed. It is unlikely to encounter any obstacles within Parliament. Even if the Bill is put to a vote, Jokowi's coalition enjoys an overwhelming majority of 471 seats vis-a-vis the opposition's 104 seats. Subsequently, the Capital Authority Agency (Badan Otorita Ibu Kota Negara) will be established to lead and oversee the whole project. Bambang Brodjonegoro, the former Minister of National Planning who led the initial study of the new capital for Jokowi, seems to be the strongest candidate to lead the agency – although there are other contenders, such as the former Governor of Jakarta Basuki Tjahaja Purnama (Ahok), the Regent of Banyuwangi Azwar Anas, and the former President Director of construction SOE Wijaya Karya Tumiyana.

But given the country's current focus on fighting the pandemic and rebuilding the economy, the rationale for this initiative to move the capital may be worth revisiting – is it just to show-off politically or a carefully considered plan?

President Jokowi has explained why the capital should be moved. First, to alleviate the excessive burden on Jakarta, which is not just a centre for the government, but also for businesses and commercial activities. Second, Jakarta and Java island are already too dense. Of Indonesia's total 271.3 million population, 56.1 per cent (151.6 million) are concentrated in Java. Third, moving the state capital would help narrow the gap in economic contribution to the GDP between regions, address the clean water crisis, and massive land conversion in Java.

Indeed, one of the most compelling reasons to move the capital appears to be environmental. Indonesia would hardly be the first country to do so. In 1960, Brazil moved its capital from Rio de Janeiro to Brasilia. In 1991, Nigeria chose Abuja as its new capital replacing Lagos. Since 2015, Egypt has been building its governmental capital city 40 kilometres away from Cairo. Mexico plans to do the same. All of these countries had faced or are currently facing serious environmental challenges. Rio de Janeiro had problems with the city's design: government offices were spread all over, and the traffic was terrible. Lagos had problems with unplanned growth and traffic. Cairo also has inadequate infrastructure problems, a very dense population, and traffic congestion. Similarly, Jakarta currently lacks urban planning and public infrastructure. It is crammed, drowning and polluted. The new capital will be built on 256,000 hectares of land, of which 5,600 hectares would be designated as the government zone within 56,000 hectares of capital city area.

The government also argues that moving the capital is one of the ways to help the national economy recover post-pandemic through investment, developing new industries, and job creation. The provincial government believes that the process of moving the capital itself and all of its related activities – the building of infrastructure, provision of services, among others – will be stimulating for the economy in the province. Thus far, a big Chinese SOE, Gezhouba Group, has expressed interest in investing in the new capital, and so have 30 companies from 7 other countries.

But there is also a strong political motivation for moving the state capital – it would serve to cement Jokowi's legacy in a manner that no other Indonesian president has achieved before. The biggest party PDIP supports this as it is in line with Soekarno's vision.

Yet, without careful planning and execution, the whole move could be problematic. For example, potential social issues can surface because of the relocation of hundreds of thousands of civil servants. Without meticulous urban planning, the new capital city will face the classic big-city problems such as uncontrollable urbanisation, social disparity and potential conflicts between newcomers and the locals. The newcomers will mostly be Javanese, Muslim, from a high education profile, with middle- and upper-level income. In contrast, the locals are mostly less educated and less well-off Dayak, Buginese and Javanese. So social conflicts are highly possible – due to tensions arising from both vertical stratification (i.e., differences in income, education, and class) and horizontal differences in religion, ethnic group, and social circles. This has happened in Jakarta, where the Betawi people are 'left behind'. It is imperative not to let this happen again. The central government must ensure the locals can also get their share of benefits in building and running the capital city.

Moving a capital city is more than just moving offices and buildings. A lot of variables must be considered so as to avoid creating new future problems. All potential unintended consequences must be vigilantly identified, cautiously anticipated, and carefully mitigated. Lest the move turns out to be driven by political ambition without careful planning – as failing to plan means planning to fail.

Source: https://fulcrum.sg/moving-the-indonesian-capital-political-ambition-or-realistic-vision