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Indonesia’s new capital: a new Nusantarian era?

By Murray Hunter - posted Monday, 9 September 2019

Just after the Indonesian election earlier this year, re-elected President Joko Widodo, popularly known as Jokowi, announced that Indonesian capital should be moved to a new location. This was initially met with scepticism. However, Jokowi in a recent press conference announced the new capital would be built south of the regional cities of Balikpapan and Samarinda in East Kalimantan. Jokowi set a timetable that would see the new capital’s completion before he leaves office in 2024, subject to the parliament approving the plan.

Proposals to move the Indonesian capital are not new. Indonesia’s first President Soekarno proposed moving the capital to Palangkaraya in Central Kalimantan back in 1957. There is more need to move the capital now than ever before. Jakarta has been badly affected by climate change making sustainability very difficult in the long term. Water is expected to be completely depleted over the next 20 years, as most households pump their water requirements from underground bores. The city is sinking very quickly with approximately 40% under sea level. Flooding regularly occurs after frequent torrential rain pours. Traffic is the worst in all of South East Asia and the air is so polluted inhabitants can feel the grit between their teeth. There is now little room for expansion as the population of greater Jakarta is now in excess of 30 million.

The selected area already has some infrastructure to support the new capital. There are two international airports in Balikpapan and Samarinda, and a sea port in Balikpapan. The location is in the middle of Indonesia, free from floods and mudslides, not susceptible to volcanic activity or earthquakes. The estimated cost of the project is USD 33 Billion, 19% funded by the Indonesian government and 81% to be funded by state-private partnerships.


The first stage plan for the yet unnamed city requires 40,000 hectares to build a new legislature, government buildings, shopping centres, utilities, and housing for 1.5 million civil servants. The capital will be built along the lines of a smart forest city which will incorporate large open spaces with an extensive public transport system. The new capital is expected to grow to 300,000 hectares over time.

The financial sector will remain in Jakarta. Jakarta will still remain a business centre with some continuing government services there. It is expected the Presidential Palace in Jakarta will still remain as a secondary residence. Questions remain whether diplomatic agencies like the United Nations, ASEAN and embassies will make the move to the new capital or remain in Jakarta. Most chose to remain in Yangon, Myanmar, when the capital was moved to Naypyitaw, and in Kuala Lumpur when the Malaysian capital was moved to Putra Jaya.

With the current populations of Balikpapan, Samarinda, and the surrounding areas just under 2 million, the additional 1.5 million will take the regional population up to approximately 3.5 million by 2024. This critical mass is expected to act as a stimulus to develop the area further. Kalimantan with a population of just under 19 million has plenty of land to increase food production easily. This should be a windfall for local small holders and SMEs. Processed foods will have to be produced locally as its expensive to ship consumer products from Jakarta.

There is some expectation that eventually there will be economic spill overs to neighbouring Sulawesi. If the new capital is a successful stimulus, then the west coast of Sulawesi would be expected to start growing in tandem next generation. Its going to take a long time for any spill over benefits for Malaysia’s Sabah and Sarawak, and Brunei due to the relative remoteness of Borneo. Although Sabah, Sarawak and Brunei are linked by air, there are no roads to Sabah and the road to Sarawak and Brunei is 2,000 and 2,500 kms respectively.

Not many moves of capital cities have paid off in the contemporary world, hence Jokowi’s move is not without risks. Jokowi is also not without criticisms from various sections of Indonesian society. Sections within the Jakarta business establishment sceptically view the move as an opportunity for the oligarchy to make a windfall. Some local economists are critical of the move timing in view of Indonesian rising debt levels. The fact that 81% of the project is expected to be funded semi-privately is also of concern to some. Environmentalists are concerned the project will lead to more deforestation and forest fires. Others claim Jokowi has another political agenda.

The centrepiece of the new capital will be a pentagon shaped monument representing the national ideology of Pancasila and the national motto Bhinneka Tunggal Ika (Unity in Diversity). This symbolism in Kalimantan which has a very diverse ethnic distribution where Muslims tend to follow a very liberal form is Islam may indicate that Jokowi is attempting to readjust Indonesian society towards a much more liberal form of Islam, Islam Nusantara he has been promoting both domestically and internationally. The hard-line Islamic Defenders Front (FPI) hasn’t been able to make a bridgehead in Kalimantan and thus unable to extend their influence into Kalimantan. In addition, Kalimantan is symbolically far away from the Northern Sumatran province of Aceh where Syariah law is being strictly practiced, something adverse to liberal, accommodating, and tolerant Indonesian culture.


The only hint about Jokowi’s political agenda was his mention of Soekarno’s dream of locating the Indonesian capital to Kalimantan in his press conference announcing the selected location for the new capital.

It’s way too early to tell whether the move of the seat of government from Jakarta to East Kalimantan is just a rort or an attempt by Jokowi to leave a legacy in moving away from the hard-line Islam growing ever so strong in Indonesia. The new capital has the potential to become a new symbol for Nusantarism where local cultures, traditions, local wisdoms, and a moderate and accommodating form of Islam reverts once again over hard-line Islam. This has been Jokowi’s philosophy with the Islamic concept of Al-Wasatiyyah or middle way.

There is a long way to go. The move will not save Jakarta from further sinking and Jokowi has acknowledged this with the joint announcement of spending money to fix Jakarta’s problems. Its still too early to tell whether Jokowi will get resistance or support to undertake this historic move. There are opponents to the very concept of Islam Nusantara and the symbolism of the new capital may just be too much for some. The parliamentary debate on the enabling Act is still ahead. Watch this space.

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About the Author

Murray Hunter is an associate professor at the University Malaysia Perlis. He blogs at Murray Hunter.

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