Building Indonesia’s new capital city: an in-depth analysis of prospects and challenges from current capital city of Jakarta to Kalimantan

ABSTRACT

This paper explores the proposed relocation of Indonesia’s capital city from Jakarta to Kalimantan. With its population of over 10 million, Jakarta faces environmental challenges such as severe traffic congestion and air pollution. This study used mixed methods and triangulation of data collection to investigate the capital’s relocation challenges and the prospects of the nations development. The methods include interviews with key informants in selected government agencies and non-governmental agencies, as well as content analysis of relevant secondary data and information. The results contribute to our understanding of the socioeconomic, political, and environmental impacts of relocating a capital city in an archipelagic country like Indonesia. The paper concludes that the proposed new capital’s location in Kalimantan offers a more sustainable alternative with the potential for economic growth and ecological preservation. It could serve as a symbol of national identity and a representation of the nation’s advancement.

KEYWORDS:

• Jakarta
• Kalimantan
• Capital City
• development

1. Introduction

Indonesia, an archipelagic country comprising 17,508 islands including Sumatra, Java, Kalimantan, Sulawesi, and Papua, and has a population of 273,879,750, ranking fourth globally (BPS, 2022). The population is unevenly distributed throughout the archipelago, with around 57% living in Java. This demographic concentration has created an economic dependency on the island, with around 59% of Indonesia’s economic contribution coming from Java. However, due to its limited land area and high population density, Java has become highly crowded, leading to multiple problems, including environmental degradation, traffic congestion, and severe air pollution (Bappenas, 2021). Jakarta, the capital city, is situated on Java Island and serves as an economic, social, and political hub on a national and regional scale. Currently, the Indonesian government is relocating the capital from Jakarta to Kalimantan.

According to (Hackbarth & De Vries, 2021), one of the primary reasons for building a new capital city is the environmental problems faced by Jakarta. Every year, the ground level in Jakarta falls by around 3–10 centimeters, leading to severe environmental consequences. Moreover, Jakarta’s physiographic location makes it highly vulnerable to natural disasters, with around 50% of the land highly susceptible to flooding, volcanic activities, and earthquakes with the potential for a tsunami. Jakarta’s overpopulation, overconcentration, and overdevelopment have resulted in severe adverse effects, underlying the decision to relocate the capital to Kalimantan.

However, relocating to a new capital often faces challenges, including conflicting location decisions, cultural-demographic factors, economics (investment), and politics. Indonesia’s capital building may face similar challenges but with different conditions due to striking geographical and demographic differences compared to other successful national capital city buildings in Brazil, Australia, Myanmar, and Malaysia. This paper is intended to contribute to our understanding of the unique socioeconomic, political, and environmental challenges facing Indonesia’s new capital project.

2. Literature review

Relocating a national capital city in a developing country is very challenging, and of course, all lessons from previous relocation projects may have to be considered because of the complexity of national capital structures and functions. Winter (2005), Neilson et al. (1972) and Ghalib et al. (2021) argue that a capital city significantly differs from other cities. The capital is a cosmopolitan because of the presence of international diplomatic missions, government agencies, and diverse economic opportunities in the public sector. Thus, technically, the national capital is the seat of a nation’s power. Other characteristics of a national capital include a coherent and unified national identity shaped by specific infrastructure and functions such as a service centre, government policy-making, and a high level of security.

The reasons for the building of capital cities in some developing countries range from anti-colonialism sentiments, the desire for equitable spatial development, minimizing inter-group jealousy, and symbolizing strength and national pride. Salau (in Potts, 1985), Ghalib et al. (2021) and Moser (2010) argue that new capital relocation often revolves around issues of effectiveness and efficiency in development. For instance, the location of the capital in the case of Abuja, Brasilia, Astana, and Cairo was to ensure equitable development. For Example, Abuja officially became the capital of Nigeria in 1991 and continues to grow today with a population of more than three million people. The high population growth in Abuja is due to the urbanization of the population seeking better job opportunities in the capital. Dodoma in Tanzania replaced Dar es Salaam, and had been prepared to be the capital since 1976. Currently, the population in Dodoma is estimated at over 300,000. Gaborone in Botswana was chosen because it has natural water resources, adequate land availability, and was a railroad crossing and land transportation. Moreover, Lilongwe was chosen to foster equitable development.

The main challenges include funding for building the new capital cities, obsession with Howard’s Garden City Principles which pays more attention to physical appearance than socio-economic issues, top-down approach, and minimum community participation in the planning process (Abubakar & Doan, 2017). For instance, a lack of public participation is reflected in the relocation failures in Naypyidaw, Putrajava, and Sejong cities in Myanmar, Malaysia, and South Korea respectively (Table 1).

Table 1. Achievement and challenges of capital city relocations.

Country	New Capital	Reasons for Relocation	Achievement	Challenges
Brazil	Brasilia	congestion, limited land for development, as well as social and economic inequality	achieved the highest per capita gross domestic product (GDP) of any Latin American city then	urban planning challenges, economic disparities with nearby regions, environmental concerns like deforestation, and the city’s isolation raised political and cultural adjustment issues for its inhabitants.
Kazakhstan	Astana	structural conditions, low population density and, great cultural diversity	bridge their ethnic variety, suppressed sub-ethnic conflict	high costs, harsh climate, necessitated cultural and social adjustments, and had urban planning issues and geopolitical implications tied to counterbalancing Russian influence.
Nigeria	Abuja	congestion, overpopulated, imbalance economic disparity	bringing stability to ties between different ethnic groups	financial burdens, led to land rights disputes from displacing locals, rapid growth, required cultural adjustments, and unforeseen security issues despite its centralized location.
Myanmar	Naypyidaw	as a symbol of the greatness of the country, safe from cyclones, and strategic location	centralized governance, enhanced security, spurred modern infrastructure, boosted regional economic growth, showcased thoughtful urban planning, and symbolized a departure from colonial-era influences.	lacks adequate commercial and educational facilities, making it less appealing for businesses and families considering relocation.
Malaysia	Putrajaya	balance population and basic economic activities	relieved congestion in Kuala Lumpur, showcased modern urban planning, became a symbol of the nation’s progress, attracted tourists with its architecture and boosted regional economic growth.	Government employees resist relocating from Kuala Lumpur to Putrajaya to avoid the challenges and costs of daily commuting and the disruption to their established routines and lifestyles.
South Korea	Sejong	focus on government administration activities	reduce Seoul’s congestion and drive balanced growth, and boosted regional economies.	government employees are hesitant to relocate from Seoul to Sejong primarily due to the challenges of commuting between the two cities, which are approximately 120 kilometers apart. The prospect of hours of daily travel not only presents physical and financial burdens but also disrupts work-life balance, as employees would spend less quality time with their families.

Source: Authors, 2023.

The decision to relocate to a capital city involves multifaceted considerations, ranging from socio-economic to strategic reasons. While some countries have successfully achieved their intended outcomes post-relocation, others face ongoing challenges, especially regarding adapting and accepting the workforce and citizens to the new environment. Indonesia’s intention to do so might be influenced by a combination of these factors, with the hope of harnessing the achievements observed in some countries and learning from the challenges faced by others.

(Akhfian, 2023) underscores the urgent necessity of relocating Indonesia’s capital due to the limited available land for state institutions and diplomatic missions in Jakarta. Rapid growth and evolving governance functions have driven the demand for space in the capital, but land constraints have hindered effective development. To address these challenges, a plan has been set in motion to establish a prospective new national capital on state-owned land, previously used for forestry activities. This strategic move is expected to not only resolves land limitations but also demonstrates the government’s commitment to preventing land conflicts and the misuse of resources during relocation. To garner public support, a compensation scheme has been devised, aiming to mitigate social and economic impacts on affected communities, thereby ensuring a smoother transition while prioritizing the rights and welfare of the local population (Arby, 2023) and (Tampi, 2023) highlight the relocation of the administrative capital to Kalimantan as a multifaceted endeavour, emphasizing its significance in addressing Jakarta’s shortcomings, promoting sustainability, and implementing a comprehensive decentralization strategy.

3. Methods

This study employed a multifaceted approach; mixed methodologies and triangulation of secondary data collection were employed to delve into the complexities and challenges associated with Indonesia’s capital relocation initiative. This endeavor aimed to discern the potential ramifications of such a monumental shift, not only for Jakarta and Kalimantan’s developmental trajectories but also for the overarching developmental aspirations of the nation.

The methodologies underpinning this research encompassed a series of structured interviews with pivotal informants drawn from a carefully curated pool of representatives from both governmental and non-governmental organizations. In addition to this primary data source, a rigorous content analysis was undertaken. This involved a meticulous, systematic, and in-depth exploration of pertinent literature precisely aligned with the central theme, facilitating both a synthesis of the extant body of knowledge and identifying any prevailing knowledge gaps. A notable aspect of this research was the inclusion of insights from 15 key informants, whose contributions were instrumental in shaping the study’s narrative. These informants hailed from diverse backgrounds, encompassing academia, influential figures within non-governmental organizations, urban denizens of Jakarta, and high-ranking government officials.

Furthermore, a thorough examination of vital regulatory and legislative documents was undertaken to bolster the study’s depth and breadth. These documents, which held significant relevance to the research objectives, included, but were not limited to, Law Number 3 of 2022 of the State Capital; various Government Regulations, including those detailing the authority structures of the Special Regional Government of Nusantara Capital, provisions related to fiscal marking and budgetary considerations; as well as multiple Presidential Regulations delineating facets of the Nusantara Capital’s developmental blueprint, spatial planning paradigms, and overarching land management strategies.

A holistic review of scholarly repositories and archives was conducted, encompassing a wide array of academic articles, governmental dispatches, policy briefs, and regulatory frameworks, all aimed at deciphering the historical precedence and rationale behind past decisions to relocate capital cities. In order to foster a more inclusive and encompassing understanding, the study also incorporated non-academic resources, including digital news platforms and blogs, to glean a nuanced understanding of prevailing public discourses and sentiments. One of the defining pillars of this research was its unwavering commitment to ensuring validity and reliability. This was manifested in the form of a rigorous screening and validation protocol applied to all sourced materials. Every source was meticulously vetted to align with the central research tenets and overarching objectives.

Quantitative datasets spanning the past decade were also harnessed to infuse the research with empirical rigor. These datasets, which provided valuable insights into population dynamics and urban traffic congestion patterns, were pivotal instruments to validate, triangulate, and augment findings from the literary review. This dual-pronged approach ensured a comprehensive and robust analytical discourse on the subject. The synthesis derived from the extensive content analysis yielded profound insights into the intricate tapestry of motivations underpinning capital city relocations, the pulse of public opinion on this transformative venture, and the potential policy implications and lessons that can be distilled from such undertakings.

4. Findings

4.1. Reasons for Indonesia’s capital city relocation

Current Indonesia’s capital city, Jakarta, is in the western part of the island of Java with a land area of 662.33 km2 and is dominated by lowlands. Jakarta is the city with the largest population in Indonesia. In 2022, the population of city was 11,075,000, with an annual growth rate of 1.47 percent (Figure 1). It is the centre of social, economic, and political activities in Indonesia and Southeast Asia. This makes Jakarta a strong magnet for other Indonesian regions. As the annual rate of urbanization growth keeps increasing, Jakarta’s limited land produces high population densities − 16084 per square kilometer in 2022. In recent years, Jakarta has developed into as a centre of socioeconomic activities and modernization that combines integrated infrastructural development with public transport, the development of a port and waterfront areas, and the conservation of historic areas to improve the quality of city parks. As expected, Jakarta has a spectrum of development complex problems that directly impact the city’s future survival. They include social and demographic inequality, traffic congestion, pollution, and land subsidence. Therefore, it is evident that Jakarta’s situation as the nation’s capital is deteriorating.

Figure 1. Jakarta’s population (in million).

Source: Authors, 2022

Historically, Jakarta’s location used to be known as Sunda Kelapa, and was a port city that became the territory of the Taruma Negara kingdom. The name was later changed to Jayakarta with the background of the people’s victory at that time against the Portuguese colonial rule. When the Dutch arrived, this area was then conquered and renamed Batavia. It was designed and arranged based on European city planning principles in the Netherlands (Figure 2). The Dutch brought their knowledge and technology in designing water structures to Indonesia, as Batavia itself has several rivers and is directly facing the sea. Several years after the conquest, Batavia experienced a setback due to population boom, and its infrastructure could no longer support it. As slums expanded, pollution levels increased, and disease outbreaks appeared as a result of poor sanitation and an overloaded sewer system. To overcome those issues, the Dutch then expanded the city further to the south, following along the Ciliwung river.

Figure 2. Batavia (old Jakarta).

Source: (Steinberg, 2007)

Situated in the archipelago of Indonesia, Jakarta’s historical trajectory reveals a rich tapestry of influences that have determined its urbanization processes over time. Originally known as Sunda Kelapa, Jakarta transformed from a mere port city to an integral part of the Taruma Negara kingdom. This transformation was not just limited to territorial expansions but also underwent significant name changes, such as when it was christened Jayakarta, symbolizing the triumphant resistance against Portuguese colonization. However, with the advent of the Dutch colonialists, the city’s identity underwent a seismic shift. The Dutch, after their conquest, rebranded Jayakarta as Batavia. This move was emblematic of their intention to refashion it in the likeness of European cities, especially drawing from urban planning tenets dominant in the Netherlands. This assertion is reinforced by Figure 2, which showcases Batavia’s design during this era (Steinberg, 2007). A salient feature of Dutch urbanism was their prowess in hydrological engineering. Given Batavia’s intricate riverine ecosystem and maritime interface, the Dutch introduced advanced water structures to the region.

However, such infrastructural endeavors could not mitigate Batavia’s demographic pressures in the subsequent years. A burgeoning population rendered the existing facilities inadequate, leading to the proliferation of slums, escalating pollution, and an overwhelmed sanitation system, resulting in frequent disease outbreaks. The city’s topographical constraints and these socio-economic challenges compelled the Dutch to conceptualize an urban expansion, which was actualized towards the southern terrains along the Ciliwung River.

Fast-forwarding to the post-colonial era, Jakarta’s urban blueprint was re-envisioned after Indonesia declared its independence in 1949. Envisaged to be a bustling metropolitan, the city was poised to cater to an estimated populace of seven million. Given Jakarta’s spatial limitations and susceptibility to inundations, the solution lay in creating peripheral satellite cities. These cities were conceptualized as residential hubs, primarily easing the daily migratory patterns to Jakarta (Steinberg, 2007).

Jakarta’s urban narrative is a palimpsest, etched with layers of colonial imprints and indigenous responses. While the city’s origin as Sunda Kelapa and its subsequent transformation into Jayakarta showcases its resilience against external dominations, the Dutch epoch, marked by Batavia, represents an era of colonial urbanism. The introduction of European planning methodologies, especially in water management, and the consequent spatial expansion strategies delineate the colonial legacy’s profound impact. However, post-independence, Jakarta has endeavored to renegotiate its urban identity, grappling with its colonial past while envisioning a sustainable future. Nevertheless, as it stands, the vestiges of its colonial history remain entrenched, influencing its contemporary urban challenges and developmental strategies.

The idea of relocating the capital city can be traced back to the aspirations of Indonesia’s first president, Mr. Sukarno. In 1957, he initiated the development of Palangkaraya City in Central Kalimantan, visualizing it as the forthcoming epicenter of Indonesia. However, with the conclusion of Sukarno’s leadership, the country’s political dynamics shifted. The subsequent administration, led by Mr. Soeharto, opted for an infrastructural emphasis on Java, mainly aiming to enhance the agricultural domain. As a result, Sukarno’s grand vision of a new capital momentarily lost its prominence. Nevertheless, following the New Order period in the 2000s, marked by reformative measures and an emphasis on regional autonomy, the concept of a new capital city gained traction again under the leadership of President Joko Widodo, commonly known as Jokowi. Jokowi highlighted the necessity for a capital that promotes even-handed development across the country. In his initial term, he passionately pursued the creation of foundational infrastructure, aiming for national integration and unity.

Relocating the capital city is considered to achieve even development across Indonesia’s vast archipelago. This relocation concept was mentioned in a presidential speech on August 16th, 2019. In this speech, a possible location for the new capital was identified. The Ministry of National Planning and Development (Bappenas) has confirmed this plan. The suggested site for the capital is centrally located within Indonesia to support economic activities and national growth. The new city aims to be a representation of the nation’s unity. The chosen regions for the development of this capital are North Penajam Paser Regency and parts of Kutai Kartanegara Regency in East Kalimantan. The development is planned for East Kalimantan Province, an Indonesian island with a population density that’s less than the national average and is located on Makassar Strait, a significant trade route in Indonesia. (Figures 3&4). The project started with a capital city design competition, resulting in a law declaring Ibukota Negara (IKN) Nusantara as Indonesia’s new capital city. This name is usually referred to and used interchangeably with Indonesia, which is rooted in its ancient name.

Figure 3. New capital city location.

Source: IKN Authority, 2023

Figure 4. Indonesia and Kalimantan’s provinces population densities.

Source: Authors, 2023

In addition, the natural environment is quite favorable. The location is a lowland region. Indonesia is located on the Pacific Ring of Fire area as earthquakes and ground movements occur frequently. The proposed location for the capital city offers the lowest potential for natural disasters. Hackbarth and De Vries (2021) asserted that one of the reasons for building a new capital city from Jakarta to East Kalimantan is that Jakarta is facing severe environmental problems. Each year, the ground level in Jakarta drops by around 3–10 centimeters, causing environmental problems and adverse consequences. Also, overpopulation, overconcentration, and overdevelopment result in severe adverse effects.

4.2. Transportation problems in Jakarta

Transportation can be described as a response to urban needs, facilitating the movement of people and goods from one place to another. The extent of a city can provide insights into the state of its transportation systems. Factors such as city size and other characteristics can affect transportation patterns, even within cities of the same region. In Southeast Asian countries like Vietnam, Malaysia, Thailand, and Indonesia, there are reports of consistent road traffic congestion. These countries have a notably high ratio of motorcycles per thousand people compared to other emerging nations. As these nations’ economies grow and possibly see a transition from motorcycle to car ownership, traffic issues might further intensify (Akimura, 2015). Greater Jakarta (Jabodetabek) as a centre for commerce, government, education, and culture, attracts 3.2 million people daily. Among the 29 million people in Jabodetabek (Figure 5), around 11% are commuters. Eighty percent of these commuters work, and 72% use private vehicles, mostly motorbikes (Firmansyah & Indra Tjahjani, 2012; Sunitiyoso et al., 2022; Suyono & Purboyo, 2018).

Figure 5. Greater Jakarta agglomeration (Jabodetabek).

Source: Authors, 2023

Commuter activities from areas like Bogor, Depok, Tangerang, and Bekasi to urban centers like Jakarta necessitate the development of efficient transportation systems, such as new train lines and bus terminals. This influx also drives the establishment of ‘park and ride’ facilities, enhanced safety measures, and better pedestrian connectivity around transit hubs. Additionally, the high footfall in these areas encourages the construction of public amenities, green spaces, and commercial facilities, thereby improving the overall commuter experience and meeting the diverse needs of the population. However, transportation facilities to go back and forth to Jakarta from Bogor, Depok, Tangerang, and Bekasi are not widely available, built evenly, and integrated. Most commuters use private cars, and road capacity does not support the growth of private vehicles. Jabodetabek commuters face traffic jams and air pollution daily, costing billions of Rupiah in lost time. Rapid population growth and poor urban planning have led to severe congestion in Jakarta. Moreover, the rise in disposable income in Indonesia has increased the desire for private vehicles, which is generally considered an indicator of social prestige. In addition to encouraging the rising use of private automobiles, the national fuel subsidy and road improvement program also boost the use of private vehicles (Gaduh et al., 2022).

The availability of adequate and appropriate public transit can alleviate the current issues. Since 2004, mass transit has been introduced, notably the Transjakarta Bus, which serves nearly every part of the city (BPS, 2022). Furthermore, Arif (2002) added that buses in Jakarta are intended to travel short distances and get to work locations; middle-class workers dominate bus users. These buses have a particular lane on the highway, on the far-left side. However, driving the bus at a certain speed is difficult because many other vehicles often enter the bus lane. The operated buses are mostly low-maintenance, so they are not comfortable, and private transportation is one of the considerations for people to move locations. Currently, the circulation of vehicles in the city is complicated due to limited land. Many lanes are made terraced to accommodate the volume of traffic on them.

Figure 6. Spatial pattern of key performance indicators.

Source: Nadi and Murad (2019)

Congestion can be measured by Key Performance Indicators, namely travel time index, low traffic flow rate, high density of vehicles, and per capita congestion delay (Nadi & Murad, 2019). Figure 6 depicts the spatial pattern of key performance indicator in Jakarta.

Firmansyah and Indra Tjahjani (2012) explain at least four causes of congestion. Pedestrian activity on the highway contributes to 36.47% of congestion with a resistance value of 5–15 seconds/vehicle. The vehicle’s average speed can be reduced by 5 to 10 km/hour. Moreover, the behaviour of public transport drivers has an impact of 31.76% on congestion with a resistance value of 5–20 seconds/vehicle. In addition, the volume of vehicles makes up 24.71% of the congestion value. The final assessment is that the number of intersections that are still not appropriately managed is exacerbated by traffic engineering, causing the high value of congestion in Jakarta. Meanwhile, the Jakarta’s (Jabodetabek) Transportation Master Plan explained that the growth of private vehicles in urban areas has increased. At the same time, the capital shares of public transportation tend to decrease from year to year. In 2002, the use of public transportation in Jakarta reached 55% and experienced a significant decline in 2010 to 28%. Daily traffic in Jabodetabek in 2003 reached 37.3 million/day and in 2010 to 59 million/day. Poor urban public transportation system triggers people to tend to use private vehicles (Sudrajat, 2020). The absence of facilities that provide comfort and safety for passengers and the uncertainty of waiting times make people tend to use private vehicles. The pressure of traveling to the centre of Jakarta occurs every day, with the highest load occurring at peak hours in the morning and evening. Approximately 7.70 million trips per day entered and left Jakarta from the areas of Tangerang, Bogor, Depok, and Bekasi in 2004. It is estimated that with a trip growth rate of 3–4% per year, the number of trips reached 10.86 million trips in 2014. Congestion that occurs at the regional boundary has penetrated the inner ring road of Jakarta (Inner Ringroad), marked by the waiting time to leave the main intersection reaching more than 10 minutes/intersection (PPPDP, 2015). Furthermore, Syaukat et al. (2019) and Ishenda and Guoqing (2019), asserted that the valuation of losses due to transportation problems in Jakarta is USD 1,372,810,765/year, most of which are fuel price, worker productivity, health, and stress levels, respectively. If the multiplier effect of these variables is considered, this value may increase.

4.3. Jakarta’s land subsidence crisis

Land subsidence is defined as a lowering in the ground surface concerning a height reference system such as the sea surface, geoid, or ellipsoid surface. It is speculated that Jakarta has experienced land subsidence with a substantial annual rate from 1975 to the present. The reduction of aquifer pressure and the decline of ground water began around the same time. There is empirical evidence of the association between land subsidence and groundwater use. One meter of land subsidence corresponds to around twenty meters of water table decline due to overexploitation. The decline and subsidence periods are substantially comparable (Abidin et al., 2015). Over the past 30 years, Jakarta, Indonesia’s economic centre, has become its most desirable investment site. Economic activity and population growth have raised urban drinking water demand. Jakarta’s northern coastline areas sank due to decades of excessive groundwater exploitation and the North coast towns were vulnerable to climate change-related evictions and flooding (Padawangi, 2012).

Overuse of groundwater resources, construction/building loads, and natural consolidation of alluvial soils have caused land subsidence (up to 20–28 cm per year) in some areas, particularly in the northern and central parts of Jakarta Kota. Additionally, contaminated water from shallow aquifers seeps into deeper aquifers as a result of excessive groundwater pumping (Dsikowitzky et al., 2016). As Figure 7 depicts, Jakarta’s land sinking is the most notable in Asia. Since 1978, Jakarta’s buildings and bridges have collapsed several times, causing land subsidence. Commercial activity is concentrated in the lowlands north of the city, where land subsidence is rapid. By 2050, coastal flooding will cover 110.5 km2 of the North Jakarta area. The annual average regional sea level rise in Indonesian waters is 3.3 mm. Thus, land subsidence exceeds sea level rise by 60 times (Takagi et al., 2021). Since the early 2000s, numerous Jakarta areas have experienced floods due to continuous ground subsidence. During the annual spring tide season in 2007, unusually high tides caused considerable flooding. As a result, inhabitants elevated their floors, raised building levels, and built barriers made of bricks or wood to keep flooding out of their homes. In the early 2000s, a temporary concrete wall was built in the Pluit area. It was periodically elevated (with most of the area now a few meters below sea level), with a second, more modern barrier built towards the end of the 2010s. North Jakarta’s potential coastal flooding area might grow to 110.5 km2 by 2050, owing primarily to continuous ground subsidence which accounts for 88% of this growth (Cao et al., 2021).

Figure 7. Land subsidence rates in Asian cities.

Source: Takagi et al. (2021)

In addition, monsoon rains caused catastrophic river flooding in Jakarta in 1996, 2002, 2007, 2013, and 2014. For instance, the February 2007 floods cost Rp 4.1–7.3 trillion; the 2013 floods cost Rp. 15 billion; and the 2014 floods, Rp. 100 million per day. Even though the Dutch and Indonesian governments are trying to reduce flooding, Jakarta is still flooded. Jakarta is flat at 0–20 m above sea level, but some areas are 1–1.5 m below sea level. Despite the natural causes, recent unregulated land-based development in the upper reaches of rivers, significant population growth in Jakarta, and poor urban-rural planning make flood-related problems even worse and difficult to manage (Asdak et al., 2018).

4.4. Air pollution in Jakarta

The relocation of the capital city is influenced by high air pollution levels, which lead to issues like acidification, eutrophication, and ozone alterations, adversely affecting health, ecosystems, and agriculture. Airborne pollutants, especially nitrogen oxides and ammonia from industries, agriculture, and fossil fuel combustion, deposit onto land and water. This nitrogen influx boosts algae and aquatic plant growth in water bodies. As these organisms decompose, they deplete dissolved oxygen, threatening aquatic life and reducing biodiversity, a phenomenon termed eutrophication (Schwela, 2006). The widespread usage of motorized vehicles in Jakarta contributes to uncontrolled pollution. Industrial waste in the city also contributes to air pollution. According to the AQ Index website, Indonesia is one of the top ten cities with the worst air quality index. Particulate Matter (PM), sulfur dioxide (SO2), carbon monoxide (CO), ozone (O3), and carbon dioxide (CO2) are some of the hazardous gases used to measure air quality levels. According to the Air Quality Life Index, the PM_2.5 (Figure 8) concentration in Jakarta is six times higher than the WHO safe guideline. If this situation persists, the air quality will become hazardous to human health. Pollution levels in Jakarta are high in some areas of West Jakarta, South Jakarta, and East Jakarta. Meanwhile, the Central and North Jakarta areas have green contours, indicating that the annual average concentration of PM_2.5 in these areas is smaller than in other parts. Pollution sources from industry and traffic influence the high concentration in some regions of Jakarta. Jakarta has a high density of transportation activity. Furthermore, the border area of Jakarta, such as Tangerang, Bekasi, and Bogor, is industrially concentrated. Thus, pollutants may accumulate in the Jakarta region on the border area. The foregoing reasons support the quest for a relocation of Indonesia’s capital city.

Figure 8. Spatial distribution of PM_2.5 concentration in Jakarta in 2020.

Source: Solihah et al. (2021)

5. Indonesia’s new capital city (Kalimantan) and the implications

Indonesia has announced plans to build a new capital city in the province of East Kalimantan, citing several fundamental reasons for its selection. The decision to build a new capital city came after years of concerns about Jakarta’s traffic congestion, air pollution, and sinking ground level. Jakarta is also located on Java, one of the most densely populated islands in the world, and is prone to earthquakes and other natural disasters. The choice of the new location is based on its high accessibility, and distance to the two main cities in Kalimantan, Balikpapan, and Samarinda. The province boasts existing infrastructure such as the Balikpapan-Samarinda Toll Roads, Trans Kalimantan, airports, and seaports that serve as access points to the new capital. Additionally, the demographic makeup of the area presents a diverse culture, which contributes to a harmonious regional environment. Additionally, the location provides sufficient land for urban and regional development, adequate raw water sources, and safe land capabilities for building construction. Finally, the location geographically lies on Indonesia’s primary trading route, the Makassar Strait, as it connects the Celebes Sea to the Java Sea (Pramono, 2022).

The new capital city is designed with a focus on Indonesia’s unique situation, with the goal of reshaping the country’s economic framework. The plan includes a tri-city model, highlighting key economic sectors, with aspirations to become one of Southeast Asia’s leading urban areas by 2045. Initial efforts prioritize building essential structures such as the presidential residence, legislative buildings, and housing for government officials. The city’s blueprint emphasizes sustainability, focusing on a circular economy and using renewable energy for a carbon-neutral environment, aiming for high-quality living conditions. Ultimately, the city seeks to establish itself as an inclusive ‘Global Urban Center’ and stand out on the global urban stage. (Pramono, 2022).

The Ministry of National Planning and Development is expected to prepare an economic development strategy for the new capital and East Kalimantan. According to the Pramono (2022), the capital city is projected to be a major driver for the Indonesian economy by creating new job opportunities in the infrastructure sector, potentially offering thousands of construction jobs. Currently, infrastructure has been prepared to accommodate 500,000 civil servants who are in the process of relocating to the new capital. Furthermore, the government aims to diversify and develop new economic sectors, adopting sustainable principles, promoting green industry development, and emphasizing high value-added. This will accelerate national economic growth through several prominent supporting clusters, including the clean technology industry, integrated pharmacy, sustainable agriculture industry, ecotourism, chemical products, and low-carbon energy. The development strategy incorporates a Three Cities collaboration, aiming to boost the regional economy by four to five times and creating 4.3–4.8 million jobs in East Kalimantan by 2045. Moreover, the new capital will adopt the concept of ‘The Future Smart Forest City of Indonesia by 2045’ to incorporate environmental values. Additionally, various bridges connecting surrounding areas to the capital city and a hydroelectric power plant to support the energy needs of the new capital have also been established. Clearly, the new capital city is anticipated to yield positive outcomes, including potential improvements in governance efficiency and effectiveness, innovative living systems, industry and human resource enhancement, sustainable infrastructure, and sophisticated mobility and connectivity.

5.1. Potential prospects

The new capital city’s selected location is North Penajam Paser Regency and parts of Kutai Kartanegara Regency in East Kalimantan, also known as Nusantara. Several considerations prompted the decision to relocate the capital city to Kalimantan. Firstly, the new location is strategically placed in the middle of Indonesian’s entire territory. It is passed by the sea lanes of the Indonesian archipelago in the Makassar Strait, making it the principal national and regional sea transport route. Secondly, Kalimantan has a relatively complete infrastructure, including airports, harbours, toll roads, and energy and water systems. Thirdly, the new capital city is close to two well-developed supporting cities, Balikpapan and Samarinda. Fourthly, the government-controlled land available for developing the new capital city will minimize the risk of natural disasters. Finally, the new capital’s relocation to Kalimantan aligns with the concept of establishing a new economic ‘centre of gravity’ at the geographic centre of Indonesian territory. The selected location is anticipated to offer extensive opportunities for jurisdictions outside Java to develop and contribute to equitable development. The Indonesian Law of New Capital (2022), specifies the new capital’s objectives, including reflecting the uniqueness and diversity of the Republic of Indonesia, becoming a smart, green, and sustainable city, becoming a modern city with international standards, promoting effective and efficient governance, and ensuring economic equity in the Eastern Region by developing clean and high-tech industries and encouraging a globally competitive economic sector.

5.1.1. Modern governance

In the era of rapid technological advancement, creating Indonesia’s new capital city is a testament to the convergence of visionary urban planning and state-of-the-art technological applications. At the heart of this transformative urban endeavor lies a series of novel technological integrations to revolutionize governance, making it more efficient, transparent, and inclusive. The digital identification system is the linchpin of the city’s technological blueprint. Digital identification is no longer a luxury but a crucial tool in modern governance, promising security, efficiency, and precision. This system, leveraging biometric data – facial recognition and fingerprints – becomes an immutable source of truth for individual identities. In a world rife with identity theft, impersonation, and forgery, biometric verification offers a robust shield against such fraudulent activities.

Furthermore, this digital identification system is separate. It converges seamlessly with diverse governmental services like healthcare, education, and social welfare. Such integration ensures that the proper citizens receive the services they are entitled to without delays or misallocation. It removes bureaucratic roadblocks, ensuring benefits flow seamlessly to the rightful recipients. The evolution of governance does not stop at identification. The building plan also accentuates the role of a data exchange layer, a virtual highway facilitating the unfettered flow of data across government departments. Imagine a resident applying for a passport or a housing loan. Instead of being mired in layers of redundant documentation, the respective offices – be it the passport office or the housing loan department – can instantly access required data from this integrated system. Such a system reduces administrative workload and slashes waiting times, heralding a new age of efficient public service delivery.

With the application layer, governance becomes interactive. This layer is a vast digital ecosystem comprising various applications and services tailored for the residents of the new capital city. Every facet of city living has become digitized, streamlined, and user-centric, from paying taxes and applying for permits to accessing public transportation information. Moreover, this layer becomes an interactive platform where citizens can engage directly with their representatives, providing feedback, airing grievances, and participating actively in the city’s continual evolution. The new capital city is not merely an urban development project but a bold statement. The seamless melding of digital identification, data exchange, and an application layer symbolizes a leap toward modern governance, setting a benchmark for Indonesia and potentially for other countries in the region. As neighboring nations observe Indonesia’s strides, they can emulate this model, thereby amplifying Indonesia’s influence in pioneering innovative governance.

However, the new capital’s vision is more comprehensive than governance alone. The city’s blueprint underscores a profound commitment to enhancing the quality of life for its residents. Air and water pollution, pressing concerns of the contemporary urban landscape, are tackled head-on with the introduction of avant-garde pollution control technologies. Factories, vehicles, and other emission sources will be under stringent monitoring. Moreover, the cityscape will be dotted with green spaces – parks, gardens, and more – that offer recreational opportunities and actively combat pollution by absorbing atmospheric carbon dioxide.

Public safety, a paramount concern, will be bolstered with cutting-edge technological solutions – CCTV cameras, smart sensors, and facial recognition systems that underpin the digital identification process. Such integrations, coupled with a robust police force and a comprehensive legal framework, promise a safe, secure living environment for every resident. However, with such grand technological ambitions come challenges. The city’s size relative to Indonesia’s massive population raises potential issues about scalability. Furthermore, the complex interplay of advanced technologies requires ongoing scrutiny to ensure data security, privacy, and ethical applications.

With its digital arsenal, Indonesia’s new capital city seeks to redefine modern urban living and governance. As the city embraces and integrates these technological innovations, it stands as a beacon – a city of the future that could guide urban development globally in the 21st century. Nevertheless, as with all pioneers, it ventures into uncharted territories, where the rewards are plentiful, but challenges are inevitable. The onus now lies on meticulous planning, adaptive governance, and an unwavering commitment to the well-being of its residents. (IKN Authority, 2023).

5.1.2. Designing innovative living systems

Relocation the capital city from Jakarta to Kalimantan offers the opportunity to revisit traditional models of urban development and revise them for the challenges and opportunities of the 21st century. As cities grow, their living systems become more complex and dynamic, with a faster pace of life and more interactions between people. In order to create a liveable, sustainable, and innovative city, policymakers and urban planners consider the factors that drive innovation and productivity and ensure that the city is designed to accommodate the faster pace of life that comes with urban growth (Bettencourt et al., 2007). Urban design and planning are critical in shaping cities’ social and economic outcomes. Well-designed and planned urban environments can promote social cohesion, reduce inequality, and improve economic opportunities (Urry et al., 2014). Instead, new urban planning and development models are needed that are more responsive to the needs and aspirations of urban residents while also creating value for investors and other stakeholders. In other words, Indonesia has the opportunity to learn from the failures of Sejong in South Korea, and Putrajaya in Malaysia (see Table 1). The community must be engaged and involved in the planning and development of the new city to ensure that residents’ needs and aspirations are addressed (Cutts, 2015).

The building offers an opportunity to consider the implications of urban design and development on the city living system to ensure the new city will be liveable and sustainable. It involves designing buildings and public spaces that promote social interaction and well-being, provide access to natural light and green spaces, and reduce noise pollution. It also requires integrating sustainable urban planning and design practices, such as promoting energy-efficient buildings and transportation, reducing waste, and preserving natural habitats (Avdeeva et al., 2018).

There is also another opportunity to create a more equitable and inclusive city where all residents have access to basic needs such as affordable housing, healthcare, and education in Indonesia, where inequality and social exclusion are often exacerbated by rapid urbanization and population growth. There is also the opportunity to set ambitious targets for reducing greenhouse gas emissions, promoting renewable energy, and improving energy efficiency in buildings and transportation. It should also acknowledge the importance of preserving natural habitats and green spaces, which are essential components of the urban living system and provide numerous benefits, such as reducing air pollution, mitigating the urban heat island effect, and improving mental health and well-being. Furthermore, the plan should also address the need for urban resiliency, recognizing that modern cities are vulnerable to various shocks and stresses, such as extreme weather events, public health crises, and economic downturns. It should set out strategies for improving infrastructure resilience, emergency preparedness, and community engagement, which are critical components of a resilient urban living system (Shorris, 2014).

5.1.3. Land availability

Indonesia’s vision to establish a new capital city on the island of Kalimantan marks a significant shift from its current capital, Jakarta. Kalimantan, known for its vast landscapes and natural resources, has been selected as the site for this monumental project. The regions earmarked for this transformation are the East Kalimantan and North Kalimantan provinces, collectively spanning a vast expanse of about 180,000 hectares or 444,790 acres.

This extensive area, currently designated for the new capital, predominantly remains untouched by urban development. It primarily serves as a hub for industries like logging, mining, and the expansive palm oil plantations, which play a vital role in Indonesia’s economy. Nevertheless, this land has not been without its challenges. Over time, significant portions of the region have faced deforestation, leading to notable environmental degradation. Moreover, the area has been a hotspot for social discord, particularly concerning land ownership and rights issues. As the plan to build the new capital unfolds, these challenges present a backdrop that may need careful addressing to ensure a sustainable and harmonious transition (Bappenas, 2021).

To address these issues, the Indonesian government has stated that developing the new capital city will prioritize sustainable development, environmental protection, and social welfare. The government has committed to restoring degraded land and forests, implementing eco-friendly transportation, and promoting renewable energy use. According to the government’s plan, about 80% of the land for the new capital city will be state-owned, and the remaining 20% will be private land. The government has stated that it will compensate private landowners for their land and that the acquisition of private land will be made through a transparent and fair process. The land availability in the proposed location for the new capital city is sufficient for the government’s plans. However, it will require careful planning and management to ensure sustainable development does not negatively impact the environment and local communities. One of the key challenges in developing the new capital city is addressing the environmental concerns related to deforestation and land degradation. The Indonesian government has committed to restoring degraded land and forests in the area and has announced plans to plant 1.2 million hectares of new forests in the area surrounding the new capital city (Kurniawan et al., 2021).

5.1.4. Sustainable infrastructure

Sustainable infrastructure projects are crucial for achieving economic, social, and environmental sustainability goals. However, financing such projects can be a significant challenge, particularly in developing countries with limited access to capital and high demand for infrastructure. Innovative financing solutions are needed to bridge the funding gap for sustainable infrastructure projects (E N V I S I O N, 2018; Sierra, 2012). Public-private partnerships (PPPs), green bonds, and blended finance are identified as the most promising financing options for sustainable infrastructure projects. These financing solutions can mobilize private capital, increase the scale and efficiency of infrastructure investments, and encourage sustainable infrastructure practices. A transparent and predictable regulatory environment that provides a level playing field for private investors is necessary to implement sustainable infrastructure financing effectively (New Climate Economy, 2016).

The government has also announced plans to implement eco-friendly transportation in the new capital city, including electric vehicles, bike lanes, and pedestrian-friendly infrastructure. This is intended to reduce air pollution and traffic congestion, which are significant issues in Jakarta. In addition to environmental concerns, the development of the new capital city also raises social issues related to land tenure and the rights of local communities. Some activists have raised concerns about acquiring private land for the new capital city and have called for the government to ensure the process is transparent and fair. To address these concerns, the Indonesian government has stated that it will compensate private landowners for their land and that the acquisition of private land will be made through a transparent and fair process. The government has also announced plans to involve local communities in developing the new capital city and to protect their rights.

5.1.5. Advanced mobility and connectivity

The emergence of new technologies in transportation, such as electric and autonomous vehicles, shared mobility services, and smart transportation systems, offers opportunities for the new capital city to improve mobility and connectivity, reduce congestion and emissions, and enhance the quality of life for residents. Sustainable mobility, which involves adopting low-carbon transport modes and reducing car dependency, can be achieved through policy measures, such as congestion charges and low-emission zones, and developing infrastructure, such as bike lanes, pedestrian-friendly streets, and public transport systems. On the other hand, smart connectivity involves using technology to optimize transport systems and reduce energy consumption, such as developing intelligent transport systems and integrating renewable energy sources into transport infrastructure (UNECE, 2021).

Integrating these new technologies requires changes in infrastructure and regulations, which will have implications for mobility and connectivity in the new city. For example, the electrification of vehicles will require the deployment of charging infrastructure and the development of smart grids to support the increased demand for electricity. Adopting autonomous vehicles will require changes in road infrastructure and traffic management systems to support safe and efficient operation. Collaboration among stakeholders, such as governments, private sector companies, and consumers, is necessary to create more sustainable and efficient transportation systems for the future (Bloomberg, 2016). Ride-sharing and bike-sharing can increase access to transportation and reduce reliance on personal vehicles, which can help alleviate traffic congestion and reduce air pollution in cities. In addition, shared mobility services can improve connectivity by providing users with more transportation options and greater flexibility in their travel choices. Further, autonomous vehicles can transform how people move around cities, reducing the need for human drivers and improving road safety. Collaboration between government agencies, private sector companies, and community organizations is necessary to address urban transportation systems’ complex challenges, such as traffic congestion, air pollution, and social equity (Eggers et al., 2012).

Public-private partnerships are critical to addressing urban transportation systems’ complex challenges. One key aspect of this relationship is the importance of infrastructure upgrades to support new technologies. Developing charging infrastructure for electric vehicles is essential to enable widespread adoption in cities. Similarly, deploying sensors and other connected devices can help optimize transportation networks and improve traffic flow in urban areas. By leveraging data from various sources, including transportation networks, urban infrastructure, and individual travelers, cities can better understand the needs of their residents and develop more effective mobility solutions. Integrating sustainable mobility and smart connectivity solutions, such as low-carbon transport modes, policy measures, intelligent transport systems, and renewable energy sources, offers a comprehensive approach to reducing the environmental impact of transportation while creating more liveable and sustainable cities. These solutions can reduce traffic congestion, improve air quality, and promote sustainable development. Collaboration among stakeholders, such as governments, private sector companies, and consumers, is necessary to create more effective and sustainable mobility and connectivity solutions that benefit everyone in the new city (CFAR, 2017).

Modernizing transportation infrastructure is essential to ensure sustainable growth and development of cities worldwide. The Indonesian government plans to introduce new technologies to improve transportation and mobility infrastructure in the new capital city, IKN. These include transportation operation systems, traffic management systems, and information systems for city logistics. Implementing these systems will enable the government to monitor traffic flow, vehicle location, and the status of goods, resulting in reduced traffic congestion, optimized usage of transportation resources, and improved overall quality of life for citizens.

The government is investing in constructing a high-speed railway connecting IKN with other cities under a public-private partnership model. The railway project is expected to reduce travel time between the cities, reduce traffic congestion and travel time, and promote economic growth by increasing access to markets and opportunities for businesses and residents. The government will also develop an extensive network of mass transit systems, including a bus rapid transit system within IKN and a new international airport with a large capacity to accommodate flights within and outside the country. The Indonesian government is also focusing on improving connectivity in IKN, designed to be a smart city with a robust digital infrastructure enabling residents and businesses to connect seamlessly. Developing high-speed broadband networks will provide residents access to essential healthcare, education, and e-government services. Additionally, the government is investing in developing a cycling and pedestrian paths network, green spaces, and parks and gardens easily accessible on foot or by bicycle.

The government’s commitment to sustainability and smart city development is commendable. It will ensure that IKN is a modern and liveable city that can provide its residents with a high quality of life. The focus on sustainability is critical to the success of IKN as it will enable the city to reduce carbon emissions and mitigate the impact of climate change. Therefore, the Indonesian government’s commitment to developing a modern and sustainable transportation and connectivity infrastructure in IKN is essential for the region’s economic growth and social well-being. The government’s investments in high-speed railways, BRT systems, a new airport, digital infrastructure, and cycling and pedestrian paths, combined with its focus on sustainability, will help transform IKN into a model city for sustainable development. Other cities worldwide could benefit from Indonesia’s example by implementing similar transportation technologies to reduce traffic congestion, improve transportation services, and enhance citizens’ overall quality of life (IKN Authority, 2023).

6. Potential challenges

6.1. Land use changes

The region of East Kalimantan is known for its high levels of biodiversity, with a wide range of species of plants and animals. The construction of a new capital city will likely require extensive land use changes, including clearing forests and other natural habitats. This could significantly impact biodiversity in the region, particularly for species already threatened or endangered. The loss of natural habitats could also disrupt the ecosystem functions that support biodiversity, such as nutrient cycling and soil formation. As noted, the new capital city will likely be accompanied by large-scale infrastructure development, including new roads, buildings, and other infrastructure. This could further exacerbate the impact of land use change on biodiversity, fragmenting habitats and disrupting ecosystem functions. The construction of roads, for example, could lead to the separation of wildlife populations and make it more difficult for them to access food and mates. Furthermore, the construction and operation of the new capital city are likely to generate significant greenhouse gas emissions, contributing to climate change, which is already a major threat to regional biodiversity. Climate change is expected to cause significant shifts in temperature and precipitation patterns, which could lead to changes in the area’s distribution and abundance of species (Spencer et al., 2023). Furthermore, large-scale land interventions for capital city relocations can have significant environmental and social costs, including the loss of natural habitats and the displacement of local communities. These interventions can also be expensive and divert resources from other important social and economic priorities.

The government must ensure the land conversion process is transparent, fair, and inclusive to mitigate the possible obstacles and repercussions of land use changes. Local communities and stakeholders should be involved in decision-making, and proper compensation, resettlement, and support should be provided. Furthermore, the government should examine alternate locations for the new capital city to minimize local displacement and the impact on natural resources and ecosystems. The government should also enact appropriate land use planning, zoning, and restrictions to conserve natural resources, ecosystems, and cultural heritage. Finally, the government should regularly monitor and analyze the effects of land use changes and adapt policies and tactics as needed. One of the most challenging aspects of land use changes is ensuring they are long-term and do not produce more harm than good. Land use changes can have beneficial and harmful consequences depending on how they are implemented. For example, by prioritizing the protection of natural resources, ecosystems, and cultural heritage, land use changes can help sustainable development and improve the quality of life in local communities. Land use changes that prioritize short-term economic advantages over natural resources, ecosystems, and cultural legacy, on the other hand, can lead to environmental deterioration, social inequality, and economic instability.

The government must take an integrated and participatory approach to land use planning and administration to ensure that land use changes are sustainable and contribute to sustainable development. All stakeholders, including local communities, civil society organizations, and the commercial sector, should be involved in the strategy. Protecting natural resources, ecosystems, and cultural heritage, fostering social equality and justice, and encouraging economic viability and resilience should all be part of the approach. Finally, the strategy should be founded on scientific facts and best practices to ensure efficacy and efficiency.

6.2. Environmental impacts

There are potential environmental impacts of Indonesia’s proposed new capital city in East Kalimantan that could get environmentalists worried. First, the region surrounding the new capital city is already facing significant environmental challenges, including high levels of air pollution, poor water quality, and degraded soil quality. These challenges will likely be exacerbated by the construction of the new capital city, as it will require significant land use changes and infrastructure development (Van de Vuurst & Escobar, 2020). The extensive land clearing and development of new buildings, roads, and other infrastructure for the new capital city will necessitate the removal of significant sections of forest and other natural ecosystems. Deforestation could be one of the most severe environmental consequences of the new capital city’s land clearing. Large-scale palm oil projects and forest fires have caused significant deforestation in Kalimantan, resulting in the loss of vital natural resources such as timber, non-timber forest products, and wildlife habitat. Deforestation can also contribute to climate change by releasing significant amounts of CO2 into the atmosphere and limiting trees’ ability to absorb CO2 through photosynthesis (Adinugroho et al., 2022).

Another potential challenge and effect of land clearing for the future capital city is biodiversity loss. Many plant and animal species live in endemic forests and are on the verge of extinction. Natural habitat destruction can result in biodiversity loss and disturb ecological processes such as pollination, seed distribution, and nutrient cycling (Teo et al., 2020). The loss of biodiversity can also severely impact human health, such as the extinction of medicinal plants and the growth of vector-borne diseases. A third possible difficulty and implication of land removal for the new capital city is soil degradation. Soil is a crucial natural resource that supports ecosystem services such as water filtering and nutrient cycling and provides the foundation for plant growth. Soil erosion, compaction, and nutrient depletion can result from land removal, lowering soil fertility and productivity. Soil degradation can also result in a loss of carbon storage, exacerbating climate change (World Bank, 2021).

The government must adopt an integrated and participatory approach to mitigate environmental impacts’ possible problems and implications. All stakeholders, including local communities, civil society organizations, and the commercial sector, should be involved in the strategy. Protecting natural resources, ecosystems, and cultural heritage, fostering social equality and justice, and encouraging economic viability and resilience should all be part of the approach. Finally, the strategy should be founded on scientific facts and best practices to ensure efficacy and efficiency (World Bank, 2021).

6.3. Social impacts

The potential social impacts of Indonesia’s new capital city project are significant and must be carefully considered to ensure the project is socially sustainable. One of the major concerns is the displacement of local communities, particularly indigenous and marginalized populations. The project will likely require the acquisition of large amounts of land, which could result in the forced displacement of local communities from their homes and traditional lands. This forced displacement could have far-reaching social impacts, including the loss of livelihoods, the disruption of social networks, and the erosion of cultural practices and traditions. The displacement will disproportionately impact marginalized populations, who may already be excluded from decision-making processes. Thus, ensuring that these communities are adequately consulted and their rights and interests are protected in the development process is essential. Another potential social impact of the new capital city project is cultural practices and social dynamics changes. The building of the capital city may bring significant changes to the region, including changes in economic and social structures, cultural practices, and traditions (Azmy, 2021; Farida, 2021).

Furthermore, large-scale population mobility may cause a breakdown in social networks as people need help to create new connections and build confidence in their new areas (Farida, 2021). The inflow of new residents may also cause social and cultural changes in the surrounding towns. As more people migrate into the new capital, cultures and customs will mix, which could have beneficial and harmful consequences. On the one hand, exchanging ideas and traditions may result in a more diversified and inclusive society. On the other hand, there is the risk of cultural clashes, as immigrants may need to learn about local norms and traditions. This could lead to miscommunication and tension among different groups, deepening societal differences. In addition to these difficulties, the flood of new residents may increase crime and other social issues. As more people migrate into the area, competition for resources such as jobs, housing, and other requirements will increase. As a result, social unrest and increasing crime rates may result, as some people turn to criminal activities to meet their necessities.

To overcome these issues, the government must take a proactive approach to manage the social consequences of the new capital. This could include developing strategies to ensure that all residents have access to affordable housing, improving public transportation infrastructure to reduce traffic congestion and promote sustainable modes of transportation, and encouraging cultural exchange and understanding to foster social cohesion. Furthermore, the government might collaborate with local communities to identify and address potential sources of social conflicts, such as resource interests or cultural differences. By taking these actions, the government may ensure that establishing the new capital has a favorable social impact on immigrants and local citizens (Shimamura & Mizunoya, 2020).

6.4. Securing funding for Indonesia’s capital city building

The Indonesian government’s ambitious initiative to relocate its capital from Jakarta to East Kalimantan has become a focal point of national discussions. Intended to alleviate Jakarta’s enduring issues like congestion, pollution, and frequent flooding, the move also aims to unlock many economic opportunities. However, the venture is layered with complexities and challenges, especially considering its ten-year projected timeframe and an estimated budget of around $33 billion.

One of the paramount hurdles is the financing model. While the government has earmarked a portion of the cost from the state budget, significant reliance is placed on the private sector’s contribution. To amass funds, the government has beckoned local and international corporations to consider forming a consortium to support and help implement the project financially. However, the catch lies in the government’s clear stance of not extending any guarantees or assurances to these potential investors. The government’s reluctance is justified from a pragmatic perspective, given the massive scale of the project. Still, this might pose a dilemma for prospective investors weighing the risks against the returns.

Detailing the financial strategy, the IKN (Indonesia’s New Capital) project has been highlighted as a cornerstone in the RPJMN (National Medium-Term Development Plan) spanning 2020–2024. Preliminary figures suggest that the IKN would necessitate funding of IDR 466 trillion. This has been further dissected into three main streams: IDR 90.4 trillion from the APBN (State Revenue and Expenditure Budget), IDR 123.2 trillion from private entities, and IDR 252.5 trillion designated for KPBU. It is essential to underscore that these are provisional numbers, open to revisions based on dynamic dialogues and the evolving national landscape, especially with the government concurrently juggling challenges like the COVID-19 pandemic response.

Elaborating on the intricacies of funding, the IKN Law denotes that both APBN and non-APBN sources will be tapped into. The APBN allocation will be earmarked predominantly for fundamental infrastructure and the nucleus of governmental operations. Simultaneously, it has been envisioned as a catalyst to lure private investment into the IKN’s development fabric. The IKN Law elucidates various financing routes: conventional budgetary allocations, partnerships bridging the government and private entities, and investments via state-owned and purely private capital. International collaborations are further diversifying the financing landscape, targeting contributions aligned with a sustainable, green, and forward-thinking IKN. Creative financing mechanisms, like crowdfunding and philanthropic endeavors, are also on the table, demonstrating a multi-pronged approach to resource mobilization.

However, the project’s decade-long span adds another layer to the intricacy of the funding puzzle. The sheer duration demands consistent financial influx and an alliance with partners who possess a blend of vision, expertise, and commitment to the long-haul objectives. Moreover, the government’s pronounced inclination towards sustainability and ecological stewardship demands that investors align with these ideals. While this ethos elevates the prospective stature of the new capital, it might also narrow down the pool of compatible investors. Nevertheless, there is a silver lining, with the government actively signaling its support, particularly in areas like facilitating land acquisition and navigating environmental protocols.

In essence, while the building of the capital city underscores Indonesia’s visionary strides, the path ahead is undeniably fraught with challenges. Central to its success will be the harmonious amalgamation of state initiatives with private-sector expertise and resources, all woven together by a shared vision for a sustainable, resilient, and thriving new capital.

6.5. Opposition

Developing a new capital city in Indonesia has garnered significant attention within political and public circles, giving rise to various perspectives on its merits and potential consequences. On one hand, some segments of society see the project as a visionary step forward for the nation. It presents an opportunity to drive economic growth, stimulate infrastructural advancements, and potentially offset some of Jakarta’s urban challenges. Conversely, several entities have put forth reservations, including sections of the national parliament, scholars from the academic realm, individuals from the private sector, and local community representatives. Their apprehensions stem from the perceived financial implications of such a vast undertaking and concerns over potential socio-environmental repercussions. While Indonesia’s historical challenges with public sector management, which have sometimes culminated in public skepticism towards large-scale initiatives, play a role in shaping these opinions, the primary contention lies in prioritization. There is a belief among some that the substantial capital allocation for the new city could address more immediate concerns in areas like health, education, and poverty alleviation.

Beyond the financial aspects, the environmental dimension of the project is another significant area of discussion. Given the magnitude of the initiative, there are natural concerns about ecological disturbances and the potential displacement of local communities. Voices from certain quarters highlight potential risks to biodiversity, water resources, and the traditional lifestyles of indigenous populations. Contrasting this perspective, the government has proactively shared its vision for the new capital. They underscore the potential economic windfall from the project, suggesting it could usher in heightened investment opportunities, generate employment, and set the stage for state-of-the-art infrastructural facilities. The project, as per official communications, is about economic progress and sustainable development. The authorities ensure the new city embodies environmental conservation principles and energy efficiency.

In light of the diverse viewpoints on the project, the government recognizes the importance of maintaining open communication channels. Efforts are being made to present a holistic view of the project’s scope in terms of costs and potential benefits. By fostering a platform for dialogue, the aim is to ensure that every stakeholder feels heard and informed, irrespective of their stance. The discourse around the new capital city emulates more significant questions about development priorities, resource allocation, and sustainability. As discussions continue, the collective hope is to arrive at decisions that align with the nation’s broader goals and aspirations.

7. Conclusion

Indonesia stands on the cusp of a transformational endeavor: relocating its capital city. This move is not merely about changing administrative seats but a statement of vision, ambition, and the nation’s stride into the future. Envisioned to counterbalance Jakarta’s sprawling growth and environmental concerns, the new capital aims to symbolize modernity, inclusiveness, and sustainability. As outlined in the 2020–2024 RPJMN, the project has a comprehensive and meticulously planned financial structure, seeking funds from both public and private sources. This detailed blueprint marks the government’s commitment to laying the foundations for a city designed for the 21st century and beyond.

However, like all ambitious ventures, this project has challenges. Jakarta, the bustling metropolis that has been the nation’s capital, will retain its cultural and economic dominance. The city’s resilience is pivotal, given its environmental challenges, particularly its vulnerability to land subsidence and flooding. On the other hand, the new capital’s emergence presents lucrative opportunities, especially for the private sector. The private sector can foster a symbiotic relationship with the government’s objectives through strategic investments in infrastructure, real estate, and various facilities. This partnership will be underscored by revenue models encompassing direct user fees, concessions, tax benefits, and more, fostering mutual growth.

For capital building to truly succeed and resonate with the populace, the government’s approach must be transparent and accountable. Corruption, historically marred several public sector projects, must be proactively addressed. Engaging in holistic consultations, involving communities that will be impacted, and ensuring that every decision prioritizes the public’s welfare over a select few are crucial. This mammoth project could redefine Indonesia’s narrative on the global stage. If orchestrated with diligence, inclusivity, and foresight, it can serve as a beacon for nations worldwide, exemplifying the harmonization of development, culture, and environmental sustainability.

Acknowledgments

The research is financially supported by LPDP Indonesia, which has generously extended its academic sponsorship to the authors. LPDP Indonesia’s commitment to promoting education and research has been instrumental in our pursuit of academic excellence. LPDP Indonesia’s commitment to supporting academic endeavours and fostering research in our field has been instrumental in our research journey. The financial assistance has allowed us to access necessary resources, collaborate with experts, attend conferences, and conduct experiments, enhancing the quality and depth of our research findings.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

Some or all data, models, or code generated or used during the study are available in a repository or online in accordance with funder data retention policies.

Herein lies a pivotal source of data that has been utilized within this research;

1. https://jakarta.bps.go.id/publication/2022/02/25/5979600247867d861a1f334c/provinsi-dki-jakarta-dalam-angka-2022.html

2. https://www.ikn.go.id/

3. https://doi.org/10.3390/su11071879

4. https://doi.org/10.1016/j.ocecoaman.2021.105753

5. https://doi.org/10.1088/1755–1315/940/1/012018

Correction Statement

This article has been corrected with minor changes. These changes do not impact the academic content of the article.

Additional information

Funding

This work was supported by the The Indonesia Endowment Funds for Education (LPDP), Department of Geography and the Environtment - The University of Alabama and PTDI-STTD.