Foreign Property News | Posted by Aye Myat Thu
Indonesia's cabinet has decided to relocate the capital, moving the government out of Jakarta as President Joko Widodo looks to spur economic development in neglected areas of the populous archipelago nation.
The shift will take five to 10 years, said Bambang Brodjonegoro, the national development planning minister, who disclosed the decision to reporters on Monday.
Among the options under consideration, he said that a development plan that accounts for 1.5 million residents would cost an estimated 466 trillion rupiah ($33 billion). Widodo "has decided to relocate the capital from Java," the minister said, referring to Indonesia's crowded main island.
Jakarta's traffic problems keep worsening, Brodjonegoro said. He added that economic losses from traffic congestion in the capital was estimated to reach 56 trillion rupiah in 2013, and might inch closer to 100 trillion rupiah a year from now. The planned construction of new mass rapid transit lines is unlikely to solve the traffic problems.
"Commuting time now takes two to three hours one way, and four to five hours for a round trip," the minister said, "not to mention when traffic is more severe [than usual]."
The administration has yet to pick a destination for the new capital, but one candidate is Palangkaraya, a city 900 km northeast of Jakarta on the island of Borneo.
Widodo, who is known widely by the nickname Jokowi, told the cabinet that the relocation was designed to jump-start the economic engine in the country's more outlying regions. "We must plan a vision for national development," the president said.
Greater Jakarta is home to 30 million residents, over 10% of the population. Investments and other economic development have been concentrated in the area, leading Jakarta to gain the dubious distinction of having the world's worst traffic congestion. A severe housing shortage has emerged as well.
The idea of moving the capital from Jakarta has been floating around for decades -- Indonesia's first president and founding father Sukarno actually prepared Palangkaraya as the new capital. Widodo's predecessor, Susilo Bambang Yudhoyono, also revived the idea halfway through his 10 years in office.
Indonesia would follow other Southeast Asian nations that transferred capitals in whole or in part for economic or national security reasons. Myanmar moved its capital from Yangon to Naypyitaw in 2006. Malaysia shifted certain central government organs from Kuala Lumpur to nearby Putrajaya starting in the mid-1990s.
Ref: Property Report
