Indonesian president in UAE to woo investment ahead of capital city relocation

Indonesian president in UAE to woo investment ahead of capital city relocation
Joko Widodo. (AFP)
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Updated 05 November 2021

Indonesian president in UAE to woo investment ahead of capital city relocation

Indonesian president in UAE to woo investment ahead of capital city relocation
  • Indonesian President Joko Widodo is pushing to inaugurate the new capital before the end of his second term in 2024
  • Investment is crucial for the $34 billion capital project as only a fifth of the cost is intended to be from the state budget

JAKARTA: Indonesia’s president is in the UAE for investment talks expected to provide a crucial investment shot-in-the-arm for plans that include relocating the Southeast Asian nation’s capital from Jakarta to the island of Borneo, its envoy to Abu Dhabi has said, as the relocation is now planned for early 2024. 

The southeast Asian nation’s leaders have for decades floated the idea of moving the capital from overcrowded and polluted Jakarta, and in 2019 Widodo announced that the relocation of the country’s administrative center to East Kalimantan province would take place over the following years.

Under the plans, most government offices would move to Borneo, along with parliament, military, and police headquarters, while Jakarta would remain the country’s financial and commercial hub.

In September, the government submitted a bill to parliament for the relocation to take place in the first half of 2024. Initially, the groundbreaking was expected in early 2021, but was stalled by the coronavirus disease (COVID-19) pandemic. 

To attract foreign investors to the new city, Widodo established a steering committee consisting of global figures, including Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al-Nahyan, who he was due to meet on Wednesday.

“I expect talks about the new capital development project would be on the table during their bilateral,” Indonesian Ambassador to the UAE Husin Bagis told Arab News ahead of the meeting.

Widodo recently said his visit to Abu Dhabi would focus on strengthening ties with the UAE, particularly in trade and investment.

Investment was crucial for the capital project as only a fifth of the cost was intended to come from the state budget, with the rest generated from private funding.
The area earmarked for the new capital, 1,300 km away from Jakarta, covers 256,142 hectares of forest, and straddles the districts of North Penajam Paser and Kutai Kartanegara, close to two developed cities — Samarinda, the provincial capital of East Kalimantan, and Balikpapan, an oil and coal mining town.
The relocation idea, first suggested by Indonesia’s first president in the 1960s, was announced by Widodo as a vision to build a smart, sustainable, “forest city” where 75 percent of the area would be allocated to green spaces, in contrast with the heavily polluted, traffic gridlocked Jakarta.
The move was also aimed at igniting economic growth in the eastern half of Indonesia, which is significantly less developed than the densely populated island of Java in the western part of the archipelago.
However, with Widodo pushing to inaugurate the new capital before the end of his second term in 2024, critics have become more vocal as the country continued to reel from COVID-19 pandemic recession.

Opposition lawmakers, such as Suryadi Jaya Purnama from the Prosperous Justice Party, recently warned they would object to the plans if the government did not first focus on public health and economic recovery.

Nirwono Joga, an urban planner from Trisakti University in Jakarta, said there was too little time to complete a comprehensive feasibility study that should be conducted over at least five years.
“The move in 2024 would just be symbolic but the new capital would not be a living and functioning city since it would require a much longer process,” he told Arab News.

“It would be the best legacy for the president to leave a well-prepared master plan for a future capital move instead of pushing for a symbolic move amidst the pandemic, a limited budget, and hasty preparation.”