Clogged Jakarta: Does Indonesia need a new capital?

Even as he awaits official confirmation of his election to a second term, Indonesian President Joko Widodo appears to be thinking about his legacy. He’s proposing a $33 billion plan to relocate the capital far away from clogged Jakarta. The idea isn’t as crazy as it sounds. That doesn’t mean it’ll work. 

Jokowi, as the Indonesian leader is known, is right to question Jakarta’s long-term viability as a capital city. The population has swollen to 30 million people and, while a new subway system offers some relief at the margins, Jakarta’s roads are plagued by chronic congestion and flooding. Indonesia’s planning minister has even warned about the potential for a pandemic, given poor sanitation. That’s not to mention the earthquakes, volcanic eruptions and tsunamis that periodically beset the country.

The president’s team is also correct that as a member of the G-20, Indonesia should have an administrative capital that functions well and can accommodate the country’s predicted rise as a major economic player. Building one from scratch would help boost Jokowi’s plans to increase infrastructure spending. The government also wants to spread development beyond Java, the island on which Jakarta is located and the source of about 60 percent of gross domestic product. 

Other countries — from Malaysia to Australia, Pakistan, Myanmar, South Korea and Brazil — have created new, purpose-built centers for the machinery of government. Their example, though, illustrates the pitfalls Jokowi needs to fear. 

It’s one thing to build a more efficient capital. (The plan is for the executive branch, legislature and ministries to shift; Bank Indonesia and investment functions will remain in Jakarta.) It’s another to construct monuments to national vanity. Cities and governments that work well aren’t just about having the world’s tallest this, longest that, or highest the other thing, as if such superlatives could instill a sense of nationhood. Malaysia fell prey to this temptation in the 1990s. Indonesian planners ought to focus instead on what any city needs to work, such as communications, transport links, sustainability and the ease of doing business. 

Related to this is the other obvious issue: location. Malaysia’s new administrative center, Putrajaya, is a short journey from Kuala Lumpur, the long-time business and political center. The same holds true for Sejong in South Korea, a brief and pleasant train ride from Seoul. While shifting offices to those new areas has eased congestion, it hasn’t revolutionized the way decisions are made in either country.

For its part, Canberra was intended from the earliest years of Australian federation to be the national capital. I grew up and was educated there; I am the son and sibling of career civil servants. Lavished with federal resources, the city is extremely livable but can be very insular and subject to groupthink. Canberra can also be used as a byword for whatever ails Australia at any given moment.

Other countries that have created capitals far from traditional cultural or commercial centers have fared less well. It’s a stretch to blame all the flaws in Brazilian politics and economics on Brasilia, the capital designed by Oscar Niemeyer in the 1950s, but its air of faded ambition does seem emblematic of the country’s recent travails.

While Jokowi hasn’t officially decided on a venue, talk of locating the new capital in central Kalimantan, on the island of Borneo, is worrying. This would force a wholesale shift, not just next door from the existing capital but to another part of the extensive country entirely.

Indonesia is a sprawling archipelago of 17,000 islands and the concept of the state and its structures has been an elastic one. It’s an incredibly diverse place geographically, ethnically and in levels of development. While decentralizing political authority might make sense in theory, shifting off of Java, the most densely populated island and the traditional seat of power, would bring no small amount of upheaval.

Economic management would be bifurcated under the plan outlined Monday and, while Indonesia has become an easier place to do business, it still sits only in the middle of the World Bank’s rankings. A site in Kalimantan risks becoming a bureaucratic outpost, removed from the concerns of Indonesia’s most populous regions.

Indonesian Borneo may also not be prepared to handle the excitement: GDP per capita is a fraction of Jakarta’s and the island is one of the main sources of air pollution known as “the haze” that blankets swathes of Southeast Asia each year as land is cleared for agriculture. 

Certainly, given the threats posed by climate change, every critical government agency needs a backup site. But does Jakarta need to be abandoned? A better idea might be for the government to focus on the difficult infrastructure and planning decisions required to preserve the megacity as the seat of authority while looking for a place nearby that might work as an administrative hive. If the capital is going to move, it probably shouldn’t go far. 

To contact the author of this story: Daniel Moss at dmoss@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Daniel Moss is a Bloomberg Opinion columnist covering Asian economies. Previously he was executive editor of Bloomberg News for global economics, and has led teams in Asia, Europe and North America.

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