Jakarta will be replaced by a yet-to-be-built city in Kalimantan, on the island of Borneo

Why is Indonesia moving its capital city? Everything you need to know

What is happening in Indonesia?

Indonesia’s president, Joko Widodo has announced the national capital will move from Jakarta, on the island of Java, to the province of East Kalimantan, on Borneo.

Widodo told a press conference in Jakarta on Monday: “The government has conducted in-depth studies in the past three years and as a result of those studies the new capital will be built in part of North Penajam Paser regency and part of Kutai Kertanegara regency in East Kalimantan.”

This is a plan that has been suggested by various Indonesian presidents over decades, but it looks like the move will finally, actually happen. Widodo said the government will prepare a bill to be considered by the House of Representatives. If approved, construction could start next year.

Joko Widodo (@jokowi) Pada siang yang berbahagia ini, saya menyampaikan bahwa pemerintah telah melakukan kajian mendalam, terutama tiga tahun terakhir.

Hasilnya, lokasi ibu kota baru paling ideal adalah di Kalimantan Timur, sebagian di Kab. Penajam Paser Utara dan sebagian di Kab. Kutai Kartanegara. pic.twitter.com/CjxTz3joQ4

Where will the new capital be?

The move would see the government’s administrative functions moved from Jakarta to a yet-to-be-built city in Kalimantan, more than 1,000km away. Kalimantan is the Indonesian portion of the island of Borneo, which is also shared with Malaysia and Brunei. However, Jakarta will continue to be the nation’s commercial and financial centre, and it is believed that the majority of its nearly 10m residents would stay in Jakarta.

Widodo said moving the capital would cost 466 trillion rupiah ($32.7bn), of which the state would fund 19%, with the rest from public-private partnerships and private investment. The price tag includes new government offices and homes for about 1.5 million civil servants.

When will the move happen?

If parliament approves the bill, construction on the new capital would begin next year on a plot of 40,000 hectares. The government expects to start moving some of its bureaucrats by around 2024.

Why is it moving the capital?

Widodo says that the relocation is about addressing inequality and relieving some of the burden on Jakarta, and the island of Java. Java is home to 60% of the country’s population and more than half of its economic activity. Kalimantan is almost four times bigger, but accounts for less than a tenth of the gross domestic production.

Kalimantan is also much more central in Indonesia’s archipelago of 17,000 islands.

“The location is very strategic – it’s in the centre of Indonesia and close to urban areas,” the president said in a televised speech. “The burden Jakarta is holding right now is too heavy as the centre of governance, business, finance, trade and services.”

Jakarta is also struggling under a huge environmental burden. Air quality in the city has plunged over the last few months, recording worse conditions in June than notoriously polluted cities such as Delhi and Beijing, prompting a group of activists and environmentalists to sue the government to take action.

Indonesia’s capital is also sinking. Areas of north Jakarta, including the seawall designed to protect them, are falling at an estimated 25cm a year, due to subsidence. The city does not pipe in enough drinkable water, so Jakartans rely largely on wells which extract water from shallow aquifers, leading to the the land above it collapsing.

The problem has been exacerbated by the explosion of new apartment blocks, shopping malls and even government offices and increases in the risk of a catastrophic flooding.

What are the concerns about the move?

Kalimantan is home to major mining activities as well as rainforests, and is one of the few places where orangutans live in their natural habitat.

The government says that the new city would be built on state land near the existing urban centres of Balikpapan and Samarinda and has promised the environmental impact will be positive.

“We will not disturb any existing protected forest, instead we will rehabilitate it,” the planning minister Bambang Brodjonegoro, was reported as saying in the South China Morning Post.

But there are fears that the plan and the increased number of people living on the island will have serious environmental impacts including for the rainforest habitat.

Environmentalists have said the relocation needs to be carefully handled or it will result in leaving one ecologically damaged area, only to create another.

How unusual is it to move your capital?

A bit, but not unheard of. In 2005 Naypyidaw replaced Yangon as the capital of Myanmar. Like the proposed capital of Indonesia, Naypyidaw was a planned city, as Canberra was when it became Australia’s capital in 1911. Brasília, another planned city, replaced Rio de Janeiro as capital of Brazil in 1960, moving the capital to a more central location in the country.