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Jakarta Post

Does relocating capital city make financial sense?

  • M. Fadhil Hasan and Achmad Nur Hidayat

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PREMIUM
Jakarta   /   Tue, September 17, 2019   /  12:05 pm
Does relocating capital city make financial sense? Construction continues on the Balikpapan-Samarinda toll road that will pass Samboja in Kutai Kartanegara, East Kalimantan. The Samboja toll gate will be one access point to Indonesia's new capital city. (Antara/Akbar Nugroho Gumay)

President Joko “Jokowi” Widodo has officially announced the movement of the capital city from Jakarta to the East Kalimantan regencies of North Penajam Paser and Kutai Kartanegara. The government will prepare 180,000 hectares of land for the new capital, to be built on 40,000 ha of land. The remaining 140,000 ha will be developed further for the new city’s expansion, including green and open areas. About Rp 466 trillion (US$32 billion) will be needed for the whole project, of which 19.2 percent (Rp 89.4 trillion) will be covered by the state budget and the remaining Rp 376.6 trillion by private investors under public-private partnership schemes. The idea to relocate the capital of a nation is not uncommon. In the last century, at least 30 countries have relocated their capitals. Some have been successful; others failed. There are some lessons to be learned from ot...

Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.