James Massola, Karuni Rompies, Jakarta – Indonesian President Joko Widodo has ended months of speculation and finally revealed the country's national capital will move to a newly constructed city on the island of Borneo.
The current capital of Jakarta is badly polluted, overcrowded, choked by traffic, prone to flooding and is sinking by up to 10 centimetres per year in some places.
On Monday, Joko announced the new capital would be near the city of Balikpapan, which is home to about 800,000 people. It would be partly situated in Penajam Paser Utara regency and partly Kutai Kertanegara regency – both in East Kalimantan province. He did not say what the name of the new city would be.
The new city will join Canberra, Brasilia, Washington and Myanmar's Naypyitaw as planned capital cities, and construction is expected to start in late 2020.
Indonesia owns about 75 per cent of the island of Borneo, which it calls Kalimantan, and it has five provinces on the island.
"Why East Kalimantan?" Joko asked at the announcement. "First, it has fewer earthquakes, floods and forest fires. Second, it is strategically located as it lies right in the centre of the country. Third, it is located near developed cities including Balikpapan and Samarinda. Fourth, it has sufficient infrastructure and fifth, some 180,000 hectares of government land is available."
"Jakarta will remain the centre of business, finance, trade and services at a regional and global level," Joko said.
The President said that about 19 per cent of the cost of financing the new capital – estimated to be at least $45 billion – will come from the state budget and the rest will be paid for by "asset management".
That means, in practice, that revenue from former government buildings in Jakarta that are rented out or sold will help finance the development of new capital city. The government will also look to public-private partnerships to help pay for the project. But the move will likely cost the private sector and the diplomatic community in Jakarta billions.
A target date of 2024 has been set for the first residents to move to the new city. This is the last year of the President's second and final five-year term. The population of the new capital is expected to grow rapidly to 1.5 million people.
Bandung Institute of Technology experts have warned as much as 95 per cent of north Jakarta could be under water by 2050.
"Many have asked why should we move now. The answer is that the burden on Jakarta and Java is becoming bigger. In Jakarta we often suffer traffic jams and flood," Joko said.
Fifty-four per cent of Indonesia's population is on Java, which also generates 58 per cent of Indonesia's gross national product, which makes the move part of a broader strategy to decentralise the country's economic growth.
Indonesia's first president, Soekarno, flagged the idea of moving the nation's capital to Kalimantan in 1957.
"The plan to move the capital started a long time ago... after 74 years of independence Indonesia has never designed its own capital," Joko said.
But much of the island of Borneo is home to huge swathes of forests and endangered species such as orangutans, and environmental groups will not be pleased that some of these forests will be cleared for the development of the new capital. They have already flagged concerns about the impact the move will have on the local environment and fauna.
However, while Indonesia's leaders get on with planning a new capital, the current capital of Jakarta will remain mired in problems that the shift will not fix, and some sections of Joko's government have privately fought the move, arguing it is simply too costly.
The population of greater Jakarta, including satellite cities and commuter towns, is home to about 30 million people and the traffic is so bad that in 2017, the Minister of National Development Planning Bambang Brodjonegoro estimated it would cost the economy $US5 billion ($7.4 billion) annually.
In recent months the pollution has become so bad that Jakarta has topped the list of most polluted cities in the world on the AirVisual website, which collects readings from US embassies and other sources around the world.
Air Visual pays particular attention to PM 2.5 particles – because these polluting particles are less than 2.5 microns in width (30 times smaller than a human hair) and can travel deep into a person's lungs and cause long-term damage. Jakarta has recently recorded air quality index rankings (AQI) readings of up to 270 (considered "very unhealthy") readings in the 160s are a daily occurrence – with potentially serious consequences for residents.
The city is sinking rapidly because much of the population relies on bore water. Furthermore, rising sea levels place the northern part of the city in particular, which sits on Jakarta's bay, at greater risk of flooding. Bandung Institute of Technology experts have warned as much as 95 per cent of north Jakarta could be under water by 2050.