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New Capital For Indonesia

Indonesian President Joko Widodo has picked East Kalimantan as the location for Indonesia’s new capital in order to relieve the strain on Jakarta.

The burden on Java Island, where Jakarta is, has been mounting, as it is home to 150 million people, or 54 per cent of Indonesia's population, and accounts for 58 per cent of its gross domestic product (GDP).

Shifting the capital outside Java would help make future economic development more equitable, said President Widodo. The shift will cost billions of dollars and will take several years.

Under the relocation plan, Jakarta will become the commercial capital of Indonesia, Southeast Asia's largest economy, while a new city will become Indonesia's administrative capital. Comparisons have been made to the roles played by Kuala Lumpur and Putrajaya respectively in Malaysia.

The Indonesian government had previously shortlisted two regions on the island of Borneo for the new capital: East Kalimantan and Central Kalimantan.

East Kalimantan is the largest province by land size after Papua and Central Kalimantan, and has vast eastern coastal areas.

These take up parts of its two largest cities, Balikpapan - which is a two-hour flight from Jakarta - and Samarinda, which faces the deep-sea Makassar Strait.

The new capital will be located between two regencies in the province - Penajam Paser Utara and Kutai Kartanegara - which also face the Makassar Strait.

East Kalimantan has low poverty levels, a good education base and a small population that could be receptive to newcomers. It is home to a mix of ethnicities. It has an international airport in Balikpapan and a domestic one in the neighbouring city of Samarinda, as well as a cargo seaport and six dams. Also, a toll road linking Balikpapan and Samarinda is expected to be ready this year.

But first, Parliament will have to pass a law to greenlight the President's plan, which could cost around 466 trillion rupiah (S$45.4 billion) and take anywhere between three to four years for the construction to take place – including dams, water sanitation, roads and building. The new administrative capital will initially occupy around 40,000ha of land.

The government would complete the design work and masterplan in the middle of next year, around the same time that it plans to finish drafting a Bill to put before Parliament.

The Indonesian President has expressed his commitment that the protected forests in the area would not be touched, as they would function as green belts for the new city, which is yet to be named.

Why East Kalimantan

Two regencies – Penajam Paser Utara and Kutai Kartanegara – in East Kalimantan have been chosen as the site for Indonesia’s new administrative centre. Some of the reasons for the selection include:

  1. Safety – they are sheltered from natural disasters such as earthquakes.
  2. Strategic Location –  at the centre of the entire archipelago and close to the well-developed cities of Samarinda and Balikpapan.
  3. Adequate Infrastructure – an international airport in Balikpapan and a domestic one in the neighbouring city of Samarinda, a cargo seaport, six dam and a toll road linking Balikpapan and Samarinda which should be ready this year.
  4. Available Land – adequate government-owned land – up to 180,000ha – on which the capital can be built.