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What Would It Really Take to Move The Indonesian Capital?

The answer? A whole bunch of money.
18 April 2017, 7:52am
Construction in Jakarta. Photo by Padat/ Flickr Creative Commons

Jakarta is such a hot mess that Indonesian presidents, starting way back with the country's founding father Soekarno, have dreamed of packing up Istana Merdeka and moving the entire capital somewhere else. Soekarno set his sites on Palangkaraya, a tiny city in Central Kalimantan that was chosen, in part, because of its location. Palangkaraya is pretty much the center of the country, and moving the capital would send a powerful message to Indonesia's long-neglected east about a possible end to decades of Java-centric policies and ideas.

Back then Palangkaraya was a new city (est. 1957) nestled in middle of lush Borneo rainforest. But today, it's also routinely the site of terrible choking haze caused by the country's annual brush fires. It's not enough to take Palangkaraya off the list, but the National Planning Development Agency (Bappanas) officials said they were eyeing other locations as well.

"It is not automatically Palangkaraya, but we will look at several alternatives and also set some criteria," Bappenas Chief Bambang Brodjonegoro told the Sydney Morning Herald.

This is Palangkaraya. Photo by Midori/ Wikimedia Commons

President Joko Widodo told Bappenas to draft a study to see if the country could realistically change capitals. He had a few requirements: it can't put the country into debt and it can't be a tax on the state budget. So the plan is still very much in the idea phase.

We don't know where the proposed new capital would be—or even if Jokowi has any interest in actually moving the government to a new city. But what we can figure out is the answer to one simple question: what would it actually take to move the Indonesian capital? Turns out, a lot.

A capital is more than the place where the president lives. Jakarta is home to more than 950,000 civil servants, working at 35 government ministries. There are another 52 government buildings like the offices of Corruption Eradication Commission (KPK), Financial Services Authority (OJK), and the Central Statistics Agency (BPS) that would likely need to move. Then add in the House of Representatives complex in Senayan, the Supreme Court, the Attorney Generals Office and you start to see how big of a project this actually is.

"Separating political and economical administrative matters will be difficult," explained Agus Hadna, the head of policy study at Yogyakarta's Gadjah Mada University (UGM). "It's not a matter of simply moving government buildings. You also need to move the political and economical systems that has been put in place for dozens of years."

Not to mention the impact on a city like Palangkaraya. If you take the number of civil servants working for the central government alone the population of a tiny city like Palangkaraya would grow by more than 80 percent. That's not even counting lawmakers (there are 560 of them) and the embassies (about 100) that would need to move as well. How much would this all cost? About Rp 100 trillion ($7.51 billion USD), according to some estimates, or about 4.7 percent of the annual state budget.

That number that looks like a deal compared to the amount spent on Kazakhstan's gleaming new capital Astana, a futuristic city built from scratch in the Kazak steppe. That capital cost between $15 and $40 billion, including the cost for the Bayterek tower's giant golden egg. Astana is so cashed-up that locals have taken to calling it "the Dubai of the North" in reference to another pricey city built with piles of oil cash.

Plenty of countries have move their capitals, either splitting the government and business centers apart completely, or moving the bulk of administrative offices off-site to a new, nearby city. It's an idea that has worked elsewhere in the past, but that doesn't mean it is without risks, said Agus.

"The cost of building new infrastructures is measurable, but the cost of how it would affect the economy will be difficult to measure," Agus told VICE Indonesia. "But I'm sure all the hiccups and the impact of separating political and economic matters can be managed in time."