Jokowi urged to cancel plans to relocate the capital

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Indonesia Resources Studies (IRESS) holds Discussion about “Questioning the Plan to Move the State Capital” in the Parliamentary Complex in Jakarta, Tuesday (03-09-2019). (photo: IO/Dan)

IO, Jakarta – President Joko Widodo’s plan to move the Capital from Jakarta to a city located in the Regency of Kutai Kartanegara and Regency of North Penajam Paser has fallen under strong criticism. After all, it is predicted that the budget, which is an enormous sum of IDR 466 trillion originating from cooperation with private parties, would balloon up to 5 times the original amount. Furthermore, the moving of the capital city is deemed to have been an extremely sudden decision taken without thorough planning, nor without listening to the people’s aspirations. Even worse, the decision was made amid a large number of unresolved economic, industrial, health, and unemployment issues.

The House of Representatives (Dewan Perwakilan Rakyat – “DPR”) Deputy Speaker Fadli Zon considers that the plan to move the capital is rushed, as so far the Government has not submitted any official documents to DPR for review. He questioned the urgency of moving the State capital, as there are other issues with higher priority to be resolved: poverty, unemployment, current transaction deficit, and the Papuan conflict. “Moving the State capital out of the blue, suddenly talking about the State capital. I think the public should have the right to participate, to have their aspirations heard. Is this really something that the people want, or is it just something that the President wants?” he said in the discussion about “Questioning the Plan to Move the State Capital” held by Indonesia Resources Studies (IRESS) in the Parliamentary Complex in Jakarta, Tuesday (03-09-2019). 

Fadli questioned the source of the IDR 466 trillion to be used for the mega project. He strongly criticized the Government’s early discussion of investment plans for the construction of the new capital, including (inevitably) investment from China. He believes that the plan to move the capital should be cancelled if there is no budget for it. After all, even the funding scheme for it is not clear yet. “What will the scheme be like? What kind of private enterprise-State-owned Enterprise scheme will it be? Even SOEs are now losing money (how can they compete?). Are we talking about domestic or foreign private companies? We don’t want our country to be controlled by foreign interests,” he said.

Fadli is also concerned that the plan to move the capital is only an excuse to cover the Government’s inability to resolve existing issues. He reminds us that Jokowi’s plans will be obstructed by several existing regulations: there will be at least five laws that need to be revised for the move to be legal: Law No. 29 of 2007 concerning the State Capital, Law No. 24 of 2007 concerning the Mitigation of Disaster, Law No. 3 of 2002 concerning National Defense, Law No. 23 of 2014 concerning Regional Government, and Law No. 10 of 2016 concerning District Head Elections. “We don’t want Jokowi’s plan to move the State capital to share the same fate of the plan to mass-produce the national car Esemka, which remains unrealized till today,” he said.

Dr. Anthony Budiawan, Political Economy and Policy Studies (PEPS)’s Managing Director stated that the cost for moving the capital, now calculated at IDR 466 trillion, could conceivably expand up to five times that amount. “This figure may simply be an initial release. It is possible for it to expand to a total of Rp 2,000 trillion,” he said.

Anthony further stated that only 19% of the cost for moving would be covered by the State Budget. The remainder would be obtained from entrepreneurial (SOE, domestic or foreign business) investments, i.e. from the lease and sale of the Governmental buildings in the old capital that will be vacated in 2024. The construction of the new Capital is targeted to be performed in 2020-2024. “Such short notice. Where’s the money coming from? More debt then. Since we would only move in 2024, we would only be able to pay in the next 5 years. I think this would definitely burden the tenants, as they will be paying for a total of 40 hectares of land occupied by 1.5 million people,” he said.

Hendrajit, Geopolitical Researcher and Global Future Institute’s Executive Director, said that the plan to move the capital to Kalimantan seems to be filled by the interests of certain parties. Geopolitically, Kalimantan is located between the Islands of Java and Sulawesi and the Philippines, and it borders the South China Sea. Therefore, Kalimantan is an epicenter. “The current global trend is for America and China to fight out their dispute in the South China Sea. Therefore, if we take China’s side, America will target us in case of war,” he said.

Meanwhile, the Chairman of the National Mandate Party (Partai Amanat Nasional – “PAN”)’s Council of Honor Amien Rais urges Jokowi not just to review the plan to move the State capital, but to cancel it all together. “Let’s not play out the courtesy act. We are Malays – if it has more detriments than benefits, we should just cancel it,” he said. In view of the incomplete and vague plans made by the Government and the lack of review from the National Development Planning Agency (Badan Perencanaan Pembangunan Nasional – “Bappenas”), Amien concludes that Jokowi is leading the country in an amateurish way. “I believe that this regime would soon meet its end, unless it quickly reorganizes itself. Let’s just pray that the regime can achieve its ends,” he said.

From the opinions discussed by the speakers, IRESS Director Marwan Batubara suspects that China has an interest behind the plan for moving the State capital. “Jokowi, please be honest if China’s interests are mixed in here. We notice that China is being accommodated too much. Don’t repeat the Esemka story, which remains unrealized until now,” he said. (Dan)