Jakarta, IO – It has been almost four years since President Joko “Jokowi” Widodo revealed the grand plan to relocate Indonesia’s administrative capital from Jakarta to a greenfield site in East Kalimantan Province, on the island of Borneo in the Sepaku District of Penajam Paser Utara Regency, to be exact. That decision has stirred up controversy ever since, riven by debate between supporters and detractors over its benefits and drawbacks. In the meantime, the plan keeps lurching forward, like a car with failed brakes.
A host of public officials, including ones from the central government and regional administrations, have since set foot on “ground zero” of the new capital, officially named “Nusantara”. In March 2022, President Jokowi even presided over a foundation-laying ceremony, attended by governors from 34 provinces. The event was meant to demonstrate the seriousness of the central government and the unanimous support of all regional leaders toward the decision to relocate the capital.
The Government argues that the move is long overdue, as it was first conceived and planned during the Sukarno administration, more than seven decades ago. The original location was to have been Palangkaraya, the capital of Central Kalimantan province. During the Suharto administration, the location was shifted to Jonggol, a district in Bogor Regency, West Java.
In 2019, the Jokowi administration revived the plan, by issuing a Presidential Letter (Surpres) through a “State Capital” bill, in September 2021. Astoundingly, in just five days, the bill was passed into law. The time it took for the bill to be deliberated at the House of Representatives (DPR) was unusually brief, as other bills of such consequence have taken years, or even stalled.
The issuance of a State Capital Law has set a strong legal basis for the relocation, a consequence being that the incumbent administration and succeeding ones are legally bound to carry on with the project, estimated to be fully completed by 2045. Thus, even if a future government seeks to halt or postpone the unfinished project, the cost of doing so would be immense.
The policy rationale
We can safely assume that the Government must have had its own objective, justifiable reasons for the relocation of our capital, before it rolled out the policy. According to official explanations, the foremost reason was to promote economic equality. The Government pointed out that the national GDP has historically been predominantly generated by the island of Java, the most populous by far of the archipelago: data from Statistics Indonesia (BPS) reports Java alone accounting for 58 percent of Indonesia’s total GDP, with the remainder distributed among other regions.
This fact demonstrates that wealth is heavily concentrated in Java, and most notably in Jakarta. In terms of demographics, 59 percent of Indonesia’s population lives in Java. No wonder the majority of domestic and foreign investors make a bee-line for the island.
In fact, the gap of GDP shared between Java and other regions across the archipelago has narrowed in the past three years, as the Government boosted infrastructure development in the latter. The latest statistics report regions outside Java now collectively contributing 43.53 percent – while a decline in the contribution from the regions actually transpire during Jokowi’s first term administration, down from 43.31 percent in 2011 to 41.51 percent in 2016. It can thus be said that the current government is also responsible for Java-centric growth. (FIGURE-1)
The second reason is that Jakarta has a limited carrying capacity and is historically plagued by overcrowding. With a population of about 10 million (12 million in the daytime as people in the surrounding suburbs commute to work), Jakarta consistently ranks among the 10 most populous cities in the world. Furthermore, regions across Java are prone to water scarcity, earthquakes, land subsidence and other problems caused by environmental degradation.
The population density in Java, and especially Jakarta, cannot be avoided because it is the administrative and commercial center of Indonesia. In fact, the current government seems to be abandoning their responsibility to solve the multifaceted problems faced by the capital. In fact, fixing Jakarta’s woes was one of President Joko Widodo’s key campaign promises.
An economic and environmental rationale can be easily disproved by arguments for regional autonomy and fiscal decentralization. The Government has actually had the equitable economic development blueprint since 2003.
Regional autonomy and fiscal decentralization laws are designed to empower local governments. The lack of development in the regions is the result of an existing development system, not the location of the state capital.
The shift in our development model from “Java-centric” to “Indonesia-centric” cannot be realized by simply relocating government buildings and state apparatus. It must stem from a policymaking paradigm, to strengthen economic capacity development in the regions. The dilution of regional leaders’ powers by the recent Job Creation Law also represents a step backward.