CAPITAL GAINS?
A look at past capital relocations helps one understand the potential benefits and pitfalls of Indonesia's talk to move its political capital, spreading development and relieving urban congestion in Jakarta.
The first wave of capital relocations were driven by security and ideology: Moscow, New Delhi, Ankara, and Islamabad were all to embody new and improved ideologies of statecraft far from the troubled waters of a more colonial-maritime-interconnected yesteryear.
The second wave of new capitals focused more on “conquering the desert." They were to spearhead the development of vast uncultivated interiors and get closer to the state's most isolated new citizens. This logic remained in vogue throughout the 21st century: the past three decades alone have seen the creation of new capital cities in Nigeria (Abuja, 1991), Tanzania (Dodoma, 1996), Kazakhstan (Astana, 1997), and Myanmar (Naypyidaw, 2005)—some of the most important emerging markets in West and East Africa, Central Asia, and Southeast Asia today.
In most cases, the new capitals do not support the “build it and they will come" theory. The traditional hubs of Almaty, Lagos, and Yangon continued to dominate their respective countries' cultural, economic, and often even political lives.
But the problem now facing 21st century capital-relocations is more social and humanitarian than political: how can booming states such as Indonesia take the edge off the gridlock and daily grind of their vastly overpopulated seats of government? Though the most immediate answer to improving life in places like Jakarta is better infrastructure and more public transport, leaders in Indonesia have seized upon the not-so-novel idea: moving capital altogether.
With an estimated 40-million population by 2040, Jakarta is already the largest human conurbation on earth without a metro. And that's not all; it is thought to be sinking by 7.5cm a year, with 40% of the city already under sea level. Though it got an efficient Bus Rapid Transit (BRT) system in 2002 and is slated to unveil the first phase of an inaugural light rail in 2018, an abundance of car-friendly policies such as plans for six new elevated toll highways and government schemes to increase “green car" ownership are only likely to exacerbate the “Jakarta jam."
Moving the administrative center of the country from its suffocating, sprawling megacity is not rocket science. Yet, for a move that's slated to begin in 2018, the government is still dragging its feet on even where that will be. Chief among the potential locations so far has been the provincial city of Palangkaraya in Borneo, an island that Indonesia shares with Malaysia and Brunei.
More centrally located in the country's vast and sprawling 5,000-km archipelago than Java, Kalimantan is crucially also less prone to earthquakes. Though lacking sea access in a country of 17,500 islands seems somewhat amiss, the prevalence of air travel would somewhat mitigate this.
Rarely uttered, however, is the real challenge of convincing anyone but high-ranking civil servants to actually move there. Even provided several million people make their lives in the interior of central Borneo, nothing guarantees that Jakarta's mad dash toward demographic overdose won't continue all the same.
After all, rarely have new capitals fulfilled their purpose of cooling down overheating hubs. Though Rio was replaced by Brasília in 1960, Rio's population still surged from 3.3 million that year to 12.3 million today. Lagos, replaced by inland Abuja in 1991, saw a similarly dramatic expansion, from 5.7 million that year to more than 21 million in 2016. As Indonesia forges ahead to create a new capital city essentially from scratch, its leaders and urban planners should remember the plight of Lagos and Rio. You can take the capital out of the city—and in the case of Astana, Abuja, and Naypyidaw, the city out of the capital—but you cannot stem the tide of global population growth.
For Jakarta to become a livable city, it must be governed, built, and provide transport like one first. Or wait it out until commuters are taking the ferry to work.
CAPITAL GAINS?
TABLE OF CONTENTS
Interview
Dr. Bambang Brodjonegoro, Minister , National Development Planning (Bappenas)
TBY talks to Dr. Bambang Brodjonegoro, Minister of National Development Planning (Bappenas), on acquiring financing for infrastructure projects and boosting private sector involvement in the country.
read articleInterview
Thomas Trikasih Lembong, Chairman, Investment Coordinating Board (BKPM)
Thomas Trikasih Lembong is the Chairman of BKPM. He was a former Minister of Trade of Indonesia from 2015-2016. Prior his appointment in the cabinet, he had a long professional career. He was a Co-Founder, Chief Executive Officer, Managing Partner, and Partner at Quvat Management Pte Ltd and also served as President Commissioner at PT Graha Layar Prima Tbk (BlitzMegaplex) since 2012. He was previously employed with Principia Management Group and the Equity Division of Morgan Stanley (Singapore) Pte. Ltd, among others. He received a bachelor's degree in architecture and urban design from Harvard. He also was elected Young Global Leader by the World Economic Forum in 2008.
read articleGuest Speaker
Tevita Lavemaau, Former Minister of Finance and National Planning , Tonga
TBY talks to Tevita Lavemaau, Former Minister of Finance and National Planning of Tonga, on the effect of climate change on the country, its work to combat inequality, and further areas of cooperation with Indonesia.
read articleInterview
Dr. Tito Sulistio, President Director, Indonesia Stock Exchange (IDX)
TBY talks to Dr. Tito Sulistio, President Director of Indonesia Stock Exchange (IDX), on the strong performance of the capital markets, its goals to increase the number of listed companies, and the growing importance of digital innovation.
read articleInterview
Amien Sunaryadi, Chairman, Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas)
TBY talks to Amien Sunaryadi, Chairman of Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), on preparing new block offerings, attracting greater investment into the sector, and pushing for exploration.
read articleInterview
Ronald Walla, President Director, PT Wismilak Inti Makmur
TBY talks to Ronald Walla, President Director of PT Wismilak Inti Makmur, on offering the public a more relevant value proposition, strengthening the ideology of Indonesia's founding fathers, and forging bigger profit margins.
read articleInterview
Teddy Tjokrosaputro, President Director, PT Rimo International Lestari (RIMO)
TBY talks to Teddy Tjokrosaputro, President Director of PT Rimo International Lestari (RIMO), on stepping back forcefully from the brink, using affordable housing as a springboard, and laying the groundwork for the country's future.
read articleReview
In the House
As strong economic growth, an optimistic political outlook, and a partially successful tax amnesty to repatriate offshore wealth continue to drive up housing prices in Indonesia's major urban centers, demand for new housing and shares in developers plummeted in 2017.
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