On Thursday, Indonesia`s parliament made a significant decision to relocate the capital city to Borneo island with granting special economic hub status to Jakarta.
The move to shift the capital away from Jakarta, raised concerns for overcrowding and sinking, is part of Indonesia`s ambitious agenda to establish a new administrative center called Nusantara, a $32-billion city currently under construction in the jungles of East Kalimantan in Borneo.
Nusantara represents a flagship project for outgoing President Joko Widodo, who has emphasized the need to decentralize wealth and development away from Java, which currently holds significant importance.
According to a copy of the new law dated March 18, an "agglomeration" council will be established to coordinate development strategies between Jakarta and its surrounding satellite cities, aiming for better urban planning and regional integration.
Speaking after parliamentary deliberations, Home Affairs Minister Tito Karnavian stressed the importance of enhancing Jakarta`s competitiveness even after it ceases to be the capital. He emphasized the need for Jakarta to maintain its economic momentum and contribute significantly to the country`s GDP.
Despite these developments, Jakarta will retain its status as Indonesia`s capital until an official decree from the president officially designates Nusantara as the new administrative center, a move anticipated later this year.
Preparations for the transition are already underway, with plans to hold Indonesia`s 2024 independence day ceremony in Nusantara on August 17. Additionally, thousands of civil servants are expected to relocate to the new capital by the end of this year, signaling the government`s commitment to the ambitious capital relocation project.
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