Indonesia to build new capital away from 'sinking' Jakarta, here's what you need to know

The building in Jakarta pictured on July 4, 2019 can be seen covered with smog and the same view on April 16, 2020 with clean sky. (Image: Reuters)

Indonesia will relocate its capital from Jakarta, which is rapidly sinking and prone to flooding, to a city that will come up 1,300 km away in a dense forest on the island of Borneo. The city will be called Nusantara, which means archipelago in Javanese.

The country’s parliament recently passed a bill stipulating the capital shift, an idea that has been in the pipeline for years. It is only now that the $32-billion project of President Joko Widodo is finally taking shape, with a framework being put in place for how the capital will be funded and governed.

"The new capital has a central function and is a symbol of the identity of the nation, as well as a new centre of economic gravity," Reuters quoted Planning Minister Suharso Monoarfa as telling parliament after the bill was passed into law.

The initial relocation  will begin between 2022 and 2024, with the city being led by a chief authority whose powers would be equal to that of a minister, the Hindustan Times reported.

The government, which has dubbed the new city as "a low-carbon super hub" that will support pharmaceutical, health and technology sectors. It will promote sustainable growth beyond Java Island, strengthen supply chains and place Indonesia in a more strategic position in world trade routes, investment flows, and technological innovation, it said.

The shift comes in the wake of Jakarta emerging as the fastest sinking mega-city in the world, submerging rapidly in the Java Sea due to excessive extraction of groundwater in the city. Its high vulnerability to climate change and flooding, along with an extremely dense population of around 30 million, also weighed on the decision.

According to data from the country’s National Planning and Development Agency, the land area for the new capital will be around 256,143 hectares (around 2,561 square kilometres)— almost all of it converted from the forest area.

Its location within the jungle of Kalimantan has raised some concerns about environment.

No timeframe has yet been set for finalisation of the project and Jakarta will remain the capital until a presidential decree is issued to formalise the change, Reuters said.