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February 8 , 2022

New Indonesian capital at Kalimantan (Borneo)

Earlier this month, the Indonesian government confirmed their 2019 announcement to relocate the capital, currently Jakarta on Java Island, to Kalimantan (Borneo Island).

Indonesia consists of about 17,000 islands and has an official population of about 270 million people which unofficially might be closer to 300 million. 50% of the population lives on Java which is considered the main island because it is home to major cities like Jakarta, Semarang, and Surabaya. And indeed, the metropole Jakarta with its 31 million people, according to Indonesia’s 2020 census, is ranking 2nd after Tokyo in the list of the world’s megacities. Living conditions in Jakarta are not good as the city suffers from chronic congestion, floods, pollution, and is sinking (in parts 2.5m over the last 10 years) because of the rising seawater level.

Kalimantan is the Indonesian portion of Borneo Island and comprises 73% of the land area, while East Malaysia and Brunei are non-Indonesian. East Kalimantan covers an area of about 130,000km2 with only 3.7 million people and the government’s decision to relocate the capital from Java to East Kalimantan makes sense.

Building a new capital in the middle of nowhere requires huge infrastructure works including but not limited to a new airport, office buildings, homes, hospitality etc. The total budget is set at a staggering $35 billion which will be a huge economic boost for Indonesian businesses. Works on the new capital have been delayed due to the pandemic and are now scheduled to start by 2024. Indonesia’s government employs millions of staff, many will have to relocate to the newly named capital of Nusantara. This might reduce the over-crowding of metropole Jakarta which is planned to remain Indonesia’s economic centre.

Kalimantan is extremely rich in forest resources and home to the famous “orang-utans”. The decision to build the new capital here has certainly the attention nationally and internationally. Environmental organisations like Greenpeace have warned that “the plan to relocate the capital to East Kalimantan if executed without prioritising environmental protection, risks creating fresh environmental problems in the new capital, just as Jakarta suffers from environmental crises today.” The public pressure of many more organisations with similar warnings makes it very likely that such international attention will force the Indonesian government to reduce logging by not renewing existing logging licences. Already, most timber factories on Java face a serious shortage of logs and sawn timber. It is widely expected that this situation will not improve which in return might make Indonesian woodworking factories more dependent on imported materials.

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