Indonesia Searches For New Capital City As Jakarta Sinks Into The Swamp Beneath It

In the Indonesian capital of Jakarta, an exploding population has dramatically lowered standards of sanitation. Overcrowding has created a near-constant state of traffic gridlock. And - oh yeah - the city's buildings are slowly sinking into the marshlands upon which they were built.

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Yet, with its population expected to eclipse Tokyo's over the next ten years, earning it the title of world's largest mega-city, Jakarta is swiftly becoming an inhospitable place for the seat of government of one of the world's largest countries and fastest-growing economies. So the Indonesia government is planning to shift most of its important government functions somewhere else on the archipelago.

Indonesia

Indonesian President Joko Widodo on Monday ordered his government ministers to formulate a financing plan to relocate Indonesia's capital, a plan that Planning Minister Bambang Brodjonegoro expects will cost $33 billion - or 466 trillion rupiah. That cost reflects developing 40,000 hectares of land, enough space for 1.5 million residents.

Of course, the tab could be lowered if only part of the state apparatus is shifted. Widodo is also planning to establish an authority dedicated to the move (most immediately, they will need to find a location), according to Bloomberg

The FT reports that Palangkaraya in Central Kalimantan province has been mentioned as one possible location, and the government has looked at three cities that could be potential candidates all on the island of Borneo.

Palangka Raya, a city of 200,000 people, has been named in the past as a potential alternative to Jakarta. It was designed in the 1950s by Sukarno, Indonesia’s founding president and an architect, who intended it to become the new national capital.

But regarding the location, only one thing is certain: The government wants the new capital to be located outside of Java, the largest island in the Indonesian archipelago.

Widodo, who is widely expected to have prevailed in Indonesia's presidential vote, which took place two weeks ago, would ideally like to move the executive branch, all government ministries, and the legislature to the new city, along with all defense and security authorities. Meanwhile, the central bank and all financial authorities would remain in Jakarta.

Some have argued that it's unrealistic to expect the private sector to help, since most companies would be unwilling to move their headquarters away from Jakarta.

But Indonesia wouldn't be the first country to decide the location of its capital based on the course of economic development:  Widodo cited Brazil, Malaysia, South Korea and Australia as examples of successful countries that embraced this line of planning. 

And underscoring the necessity for a move, scientists have estimated that, at the current rate, 95% of North Jakarta will be underwater by 2050, displacing nearly 2 million people, as the city sinks into a bog.

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