Indonesia capital relocation: USD 30 billion investment can promise lower disaster risk

Indonesia's planning minister had announced plans to move the capital of the world's fourth most populous country away from the crowded main island of Java. The move, which had been extensively advertised by President Joko Widodo during his election campaign, could cost 323 trillion rupiah to 466 trillion rupiah ($22.66 billion to $32.7 billion), planning minister Bambang Brodjonegoro has said.

Brodjonegoro had yesterday said that the president had ordered the finance ministry to come up with a financing scheme that allowed participation of private investors.

Planning Minister Brodjonegoro said the administration had yet to pick a new location but was looking at the eastern side of the sprawling archipelago. One of the contenders for the new capital city is Palangkaraya in Central Kalimantan province on the island of Borneo, state news agency Antara reported this year.

The president asked online where people thought the capital should be, prompting more than 100,000 comments. Some wanted the city in their part of the archipelago, while others were less welcoming.

An Instagram user muhammad_ramdhani021 said he did not want the capital to be moved to a possible contender Palangkaraya in Central Kalimantan province on the island of Borneo. "Let our city remain green and beautiful, unpolluted. If you decide to move to Palangkaraya, we the natives will be pushed aside."

DISASTER RISK

One of the benefits being advertised is lower natural disaster risk after the relocation. Indonesia suffers from intense seismic activity in many areas and Brodjonegoro said the capital would be an area with lower natural disaster risk, such as the eastern part of Sumatra, Borneo or the southern side of Sulawesi islands.

The low-lying capital Jakarta is prone to flooding and is sinking due to over-extraction of groundwater.

Analysts welcomed the plan, particularly after recent flooding in parts of Jakarta highlighted the vulnerability of the low-lying capitalthat is sinking due to over-extraction of ground water.

The Economist Intelligence Unit said migrating the capital made sense for long-term development and sustainability, though it warned that there were significant challenges.