[Analytics] Why Widodo really wants out of Jakarta

His legacy as Indonesia’s “Infrastructure President” already secure, Joko Widodo is wasting no time in ensuring that his decision to move the national capital from Jakarta to East Kalimantan will become the crowning achievement of a leader determined to shift the country’s balance of power away from the dominant island of Java. John McBeth specially for the Asia Times.

With legislation being rushed through Parliament and a master plan already in place, construction of the new center of government, covering 6,000 of 180,000 hectares surrounding the cities of Balikpapan and Samarinda, is scheduled to begin late next year and be completed by the end of the president’s second term in 2024.

National Development Planning Minister Bambang Brodjonegoro, the United States-educated point man on the US$33 billion relocation, told Asia Times that when Widodo announced the final site at a Cabinet meeting earlier this month there was a sense among ministers in the room of history in the making.

It needed a single-minded push from Widodo, then the Jakarta governor, to get the city’s long-delayed Mass Rail Transit (MRT) system off the ground in 2012. Now, with only five years left, Brodjonegoro says the president doesn’t want to waste even a day before his October 20 inauguration to get things rolling on a move that has been mulled over since independence.

For all the talk of a sinking, polluted, traffic-choked Jakarta as the main reason for the move, it clearly goes far beyond that. Rather, the capital shift is founded on a serious imbalance in national development, growing inequality among Indonesia’s 260 million population and what some analysts see as a perceived political necessity.

While the president first raised the issue in 2015, a year after taking power, it only gained momentum during the fraught 2017 gubernatorial election and may well have become a fait accompli after last April’s presidential race which showed just how much Islamists now have a grip on West Java, the biggest province surrounding Jakarta.

“The president wants to see a new breakthrough in Indonesia’s development,” said Brodjonegoro, who avoided commenting on the political ramifications of a development that has attracted headlines around the world. “He wants to give it a big push outside (of Java). It is not only historic but it will strengthen unity.”

Widodo is Javanese to the core. So are 36% of the city’s populace, more than its native Austronesian Betawi people or western Java’s Sundanese. But in a republic that chose standard Malay over Javanese as the national language, pragmatism is not unknown. “Finally,” predicts one Javanese-born journalist about the move out of Jakarta, “Indonesia’s capital will belong to everyone.”

Home to far more than half of the archipelagic nation’s population and a third of its land area, Java contributes to 58% of gross domestic product (GDP), ahead of Sumatra (21.7%), Kalimantan (8.2%) and Sulawesi (6.1%). Only Sulawesi has a higher annual growth rate (7.6%) than Java (5.6%).

Indonesia will join Australia (Canberra), Brazil (Brasilia), Malaysia (Putrajaya), Nigeria (Abuja), Kazakhstan (Nursultan), and Myanmar (Naypyitaw) in creating a tailor-made capital, with Brasilia as the conceptual model. In practice, says Brodjonegoro, “Jakarta will be New York and the new capital will be Washington DC.”

“The location is very strategic — it’s in the center of Indonesia and close to urban areas,” Widodo said in a nationwide television address. “The burden Jakarta is holding now is too heavy as the center of governance, finance, trade and services.”

Already beset by dangerous levels of pollution, overcrowding and traffic congestion, northern parts of Jakarta are subsiding at an increasing rate. Without a reticulation system covering only 40% of the city, aquifers are collapsing as household and community wells suck out 140 million cubic meters of water a year.

As the country’s financial and trade hub, Jakarta also has the biggest seaport and airport, infrastructure assets most other national capitals lack. That means the city’s many problems will still have to be addressed, along with further extensions to the MTR and other infrastructure projects.

East Kalimantan was chosen over a landlocked site near the Central Kalimantan province capital of Palangkaraya, strangely favored by previous presidents Sukarno and Suharto. Most importantly, it is not prone to earthquakes and other natural disasters – natural or man-made — that afflict most other parts of Indonesia.

Unlike other stand-alone capitals, it enjoys a share of commercial development, including palm oil plantations, gold and coal mining and a once-thriving oil and gas industry built around offshore gas-fields and the giant Bontang liquid natural gas (LNG) processing plant situated north of Samarinda.

Now interconnected, the South and East Kalimantan power grid currently amounts to about 2,000-megawatts, probably not enough at this point to accommodate the 500 megawatt (MW) state-run electricity utility Perusahaan Listrik Negara (PLN) estimates will be needed for the new capital.

PLN is planning a 200MW mine-mouth coal facility, northwest of Samarinda, as well as a $2 billion hydro-electric plant on neighboring North Kalimantan’s Kayan River, one of the priority projects targeted under China’s Belt and Road scheme for aluminum smelting.

Most of the 180,000 hectares earmarked for the capital is government land zoned for industrial plantations, apparently including property leased by defeated presidential candidate Prabowo Subianto and his wealthy businessman brother, Hashim Djojohadikusumo.

Balikpapan and Samarinda, the provincial capital, both have airports and are linked by a newly completed 99-kilometer expressway, which Widodo had a major hand in pushing through after the project ran out of money before he came to power.

Architecturally different from Jakarta’s grand Dutch colonial design (“It’s beautiful, but its Dutch,” says Brodjonegoro), the new presidential palace will be located next to Parliament as the centerpiece of a special administrative zone straddling the coastal regencies of Penajam Paser and Kutai Kartanegara.

The first stage will also involve the construction of ministerial buildings and housing for the initial intake of 200,000 civil servants; some ministries will be moved in their entirety and others, like finance in particular, will retain offices in Jakarta.

Recent polls show 40% of bureaucrats are opposed to the relocation plan; one senior official, Deposit Insurance Corporation chief executive Fauzi Ichsan, predicts that many will elect to leave their families in Jakarta, at least until there are better education and health facilities at the new capital.

That is likely to be taken care of in the second phase of the plan, covering 40,000 hectares, where the government plans to establish universities, schools, hospitals and commercial facilities; the 62,000 hectare Bukit Soeharto national park and other stands of virgin forest will be left untouched in an effort to keep the new capital as green as possible.

Diplomatic missions are eventually expected to join the exodus. While the Association of Southeast Asian Nations (ASEAN) Secretariat will stay in Jakarta, two countries likely to be unhappy about the move are the US and Australia, which have collectively spent nearly $1 billion in recent years building new truck bomb-proof embassies.

About 20% of the move’s overall cost will be met by the state budget, with the rest coming from private investment and what Brodjonegoro calls “asset management” – the sale and rent of government offices in choice locations across Jakarta where land prices are currently as high as $5,100 per square meter.