Indonesia Plans for New Capital City

The plan to move the capital was deemed necessary as Jakarta, a crowded and polluted city of 10 million people, has for years been battling traffic congestion which costs US$7 billion in economic losses each year. It is also one of the fastest-sinking cities on Earth with experts predicting that it could be submerged by 2050 if current rates continue. Penajam Paser Utara and Kutai Kertanegara districts, on the other hand, are at minimal risk of natural disasters, the president said in his announcement and is geographically in the centre of the country where the government already owns about 180,000 hectares of land. The government's announcement last August led to a spike in demand for land parcels in the new capital site. But with the COVID-19 pandemic and delays in development, the demand appears to have cooled for now. However, it was noted that land around the capital site remains sought after and are seen as a sound investment for the future. Although there is currently no construction work in progress, Mr Suharso Monoarfa, the minister overseeing the new capital explained that the master plan is still being worked on. “The detailed plan will follow, then we will include basic infrastructure works in cities that will support the future capital of the country, for example, Balikpapan, Samarinda,” the national development planning minister told CNA in a recent exclusive interview. A highway has been constructed to connect Balikpapan with East Kalimantan provincial capital Samarinda. The National Development Planning Minister also revealed that investors are still keen in the new capital. Now, one year on, the new capital remains a plan on hold with the government asserting several times that it will still be developed when the time is right.