Indonesia: Relocation of capital from Jakarta could begin in 2018 – govt
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Indonesia: Relocation of capital from Jakarta could begin in 2018 – govt

THE Indonesian government says it is looking into relocating its federal administrative capital from Jakarta in the next two years, but will maintain the city as the business and financial centre of the country, according to local reports.

The Jakarta Post quoted National Development Planning Minister Bambang Brodjonegoro as saying on Monday President Joko “Jokowi” Widodo had held a discussion on the details of the relocation at the Presidential Palace.

According to Bambang, who heads the National Development Planning Agency (Bappenas), Jokowi talked about the feasibility study and discussed funding for the relocation.

“In 2018 or 2019, there will be activities related to the transfer of the administration of the central government [to the new capital city],” Bambang was quoted as saying.

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However, Bambang did not mention which city would become the new capital, but hinted it would be located outside of Java. Government officials have earlier mentioned Palangkaraya, the capital of Central Kalimantan, and Jonggol in Bogor, West Java as potential candidates.

He said the Public Works and Public Housing Ministry will be tasked with leading the effort and other government bodies in carrying out the plan.


Jokowi gestures during an interview with Reuters in Jakarta, Indonesia, on July 3, 2017. Source: Reuters/Beawiharta

“We need three to four years to finish all the basic infrastructure and government buildings,” Bambang said.

While the proposal would be welcome for the city’s inhabitants who have expressed grouses over congestion, there have been mixed responses from the business community.

In April, the influential Indonesian Chambers of Commerce and Industry raised concerns on the possible relocation as businesses needed to consult the government on a regular basis.

“The business community will support the government’s programme if it benefits the people, but is this the right time to move the capital, when our economy hasn’t yet fully recovered?” Kadin Jakarta deputy chairman Sarman Simanjorang told the Jakarta Globe.

The Indonesian Employers Association chairman Hariyadi Sukamdani, however, said he did not object to the plans.

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“When that time comes [to move], information technology will be much better than today. It won’t matter that much [to be away from Jakarta],” he said.

However, Hariyadi pointed out such a move would come at a high price, and that it did not assure the domestic income disparity across the nation would be addressed.

Former national development planning minister and public policy analyst Andrinof Chaniago said moving the city would “not be a problem” from a fiscal point of view.

He said the IDR10 trillion (US$754 million) per year the government would fork out for the relocation over at least 10 years was relatively small as it was only about 0.5 percent of the IDR2,081 trillion (US$1.6 billion) allocated for government spending in the 2017 State Budget.

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