Economic Progress

Indonesia is planning to move its capital city

A view of Jakarta, Indonesia December 20, 2016. Picture taken December 20, 2016. REUTERS/Darren Whiteside - RC1CC872D350

The low-lying capital is also prone to flooding and is sinking at an alarming rate. Image: REUTERS/Darren Whiteside

Agustinus Beo Da Costa
Writer, Reuters
Share:
Our Impact
What's the World Economic Forum doing to accelerate action on Economic Progress?
The Big Picture
Explore and monitor how Economic Progress is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

Economic Progress

Indonesia’s president has decided to move the capital of the world’s fourth most populous country away from the crowded main island of Java, but has yet to finalize a new location, the planning minister said on Monday.

Indonesian President Joko Widodo and first lady Iriana Joko Widodo show their ink-stained fingers after casting their ballots during elections in Jakarta, Indonesia April 17, 2019. REUTERS/Edgar Su - RC1E14849600
Indonesian President Joko Widodo and first lady Iriana Joko Widodo show their ink-stained fingers after casting their ballots during elections in Jakarta, Indonesia April 17, 2019. Image: REUTERS/Edgar Su

President Joko Widodo’s decision comes less than two weeks after private pollsters said he had won an April 17 presidential election, although official results are not due until May 22. His challenger, Prabowo Subianto, has also claimed victory.

“The president chose to relocate the capital city to outside of Java, an important decision,” Minister Bambang Brodjonegoro told a news conference after a cabinet meeting.

Brodjonegoro said the administration had yet to pick a new location, but was looking at the eastern side of the sprawling archipelago.

At the opening of his cabinet meeting, Widodo stressed the need for new thinking about the future.

“We want to think in a visionary way for the progress of this country and moving the capital requires thorough and detailed preparation,” he said.

The current capital, Jakarta, is home to more than 10 million people, but around three times that many people live in the surrounding towns adding to the area’s severe congestion.

Brodjonegoro put the annual economic loss due to traffic congestion in Jakarta at 100 trillion rupiah ($7.04 billion).

The low-lying capital is also prone to flooding and is sinking due to over-extraction of ground water.

Have you read?

In making his decision, Widodo had also taken into account the fact that nearly 60 percent of Indonesia’s 260 million people live in Java and economic activities were concentrated there, Brodjonegoro said.

During the recent election campaign, Widodo promised to spread economic development more evenly outside Java.

The planning minister did not estimate the cost of moving the capital but said the president had ordered the finance ministry to come up with a financing scheme that allowed participation of private investors.

He said moving the capital could take up to 10 years, citing examples such as Brazil and Kazakhstan.

One of the contenders for the new capital city is Palangkaraya in Central Kalimantan province on the island of Borneo, state news agency Antara reported this year.

Authorities there had prepared 300,000 hectares of land in case it is chosen as a new government hub, Antara said.

Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Economic ProgressGeo-economics
Share:
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

Explainer: What is a recession?

Stephen Hall and Rebecca Geldard

February 19, 2024

About Us

Events

Media

Partners & Members

  • Join Us

Language Editions

Privacy Policy & Terms of Service

© 2024 World Economic Forum