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Indonesia’s Capital City Relocation to Nusantara
Table of Contents
Indonesia is relocating its capital city from Jakarta to Nusantara, a newly planned city in East Kalimantan on the island of Borneo, with the official transfer expected to begin in 2024 and be substantially completed by 2029.
The decision to move the capital stems from a confluence of factors impacting Jakarta, including severe congestion, environmental degradation, and sinking land due to excessive groundwater extraction. Jakarta is one of the fastest-sinking cities in the world, with parts of the city subsiding at a rate of over 10 centimeters per year. The relocation aims to alleviate thes pressures and promote more equitable regional progress.
On April 18, 2024, the Indonesian Parliament officially approved the final legislation required for the relocation, solidifying the legal framework for the project. The Law on the National Capital (Ibu Kota Negara/IKN) outlines the governance, funding, and development plans for Nusantara.
The Rationale Behind Moving the Capital
The primary driver for relocating the capital is Jakarta’s unsustainable urban development. The city faces notable challenges related to traffic, pollution, and infrastructure strain. Furthermore, jakarta is highly vulnerable to natural disasters, including flooding and earthquakes.
The sinking land issue is particularly acute; approximately 40% of Jakarta is now below sea level. This subsidence is largely attributed to uncontrolled groundwater extraction for domestic and industrial use. The Indonesian government estimates that without intervention, significant portions of Jakarta could be submerged by 2050. The Indonesian Agency for Meteorology, Climatology, and Geophysics (BMKG) has repeatedly warned about Jakarta’s land subsidence and its connection to climate change and unsustainable water management.
in 2023, Jakarta’s congestion cost the Indonesian economy an estimated 100 trillion rupiah (approximately $6.5 billion USD). The Jakarta Post reported on this economic impact, citing data from the National Development Planning Agency (Bappenas).
Nusantara: The New Capital City
Nusantara, meaning “archipelago” in indonesian and Sanskrit, is located in the Penajam Paser Utara and Kutai Kartanegara regencies of East Kalimantan.The site was chosen for its strategic location, relatively lower risk of natural disasters, and potential for lasting development.
The city is being designed as a “smart city” incorporating sustainable urban planning principles, green infrastructure, and advanced technology. The master plan envisions a city that is environmentally friendly, resilient, and inclusive. the initial phase of construction focuses on government buildings, residential areas for civil servants, and essential infrastructure.
The Indonesian government has allocated approximately 466 trillion rupiah (roughly $30 billion USD) for the relocation project, with funding coming from a combination of state budget allocations, private investment, and public-private partnerships. The Nusantara Capital Authority (Otorita IKN) provides detailed information on the funding mechanisms and investment opportunities. As of December 2023, the government had secured commitments for approximately 20 billion USD in private investment.
Key Entities Involved
Several key entities are central to the Nusantara relocation project:
- The President of Indonesia: Joko Widodo has been the primary advocate for the relocation and oversees the overall project.
- The Nusantara Capital Authority (Otorita IKN): Led by Bambang Susantono, this agency is responsible for the planning, development, and management of Nusantara. The Otorita IKN’s official website details its structure and responsibilities.
- The Ministry of National Development Planning (Bappenas): Plays a crucial role in coordinating the relocation with national development plans.
- The Ministry of Public Works and Public Housing (PUPR): Responsible for the construction of infrastructure in Nusantara.
- The Indonesian Parliament (DPR): Approved the necessary legislation for the relocation.
Challenges and Controversies
The relocation project has faced several challenges and controversies, including concerns about environmental impacts, land rights, and the potential displacement of local communities.
Environmental groups have raised concerns about the potential deforestation and habitat loss associated with the construction of Nusantara. The government has pledged to minimize environmental damage and implement sustainable development practices, including the preservation of
