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Indonesia picks coal and oil heartland as site of new capital city

Indonesian President Joko Widodo (left) announces the new location of the country's capital. Image courtesy of Indonesian Cabinet Secretary Office.

  • President Joko Widodo announced on Aug. 26 that the new capital would sit on the border area between the districts of North Penajam Pasar and Kutai Kartanegara, in Borneo’s East Kalimantan province.
  • Among the reasons for choosing that location are the low risk of natural disasters such as earthquakes and tsunamis, and the availability of government-owned land spanning the size of London.
  • Construction is expected to begin as early as 2021, with a completion date of 2024, when Widodo’s second and last term in office ends, the planning minister says.
  • Environmental and indigenous rights activists are wary about the mega project’s impact on the region and the prospect of land grabs by speculators looking to cash in on the relocation of the capital.

JAKARTA — Indonesia’s new capital city will sit at the nexus of the country’s coal and oil hubs in eastern Borneo, the president revealed on Aug. 26.

President Joko Widodo, who has long teased relocating the capital from the chronically congested and fast-sinking Jakarta, announced that the new capital would straddle the border between the two districts of North Penajam Pasar and Kutai Kartanegara, in East Kalimantan province.

“It’s a strategic location in the middle of Indonesia,” the president said at a press conference in Jakarta. He said the location was chosen based on a three-year assessment of the risk of disasters such as floods, landslides, forest fires, earthquakes, tsunamis, and volcanic eruptions.

Widodo said the government already owned 180,000 hectares (445,000 acres) of land there, an area about the size of London. He also cited its proximity to Balikpapan, the country’s oil hub, and Samarinda, the East Kalimantan provincial capital. Both cities have an international airport. Balikpapan is also home to refineries and a busy seaport, while Samarinda hosts the country’s main coal terminal. Kutai Kartanegara, in which the new capital will sit, is Indonesia’s biggest coal producer.

A map showing East Kalimantan province, in light red, and the two districts of North Penajam Paser and Kutai Kartanegara. Indonesia’s capital will straddle the border area between the two districts. Image courtesy of President Joko Widodo’s Twitter account.

Construction is expected to begin as early as 2021, with a completion date of 2024, when Widodo’s second and last term in office ends, according to Bambang Brodjonegoro, Indonesia’s planning minister.

“The masterplan that we’ve been developing will hopefully become an ideal city, and most importantly, will be the standard for the development of big cities in metropolitan areas in Indonesia,” Bambang told reporters in Jakarta on Aug. 1.

The first phase of the city slated for completion in 2024 will span 2,000 hectares (nearly 5,000 acres), or almost six times the size of New York City’s Central Park. By 2045, the new capital will be spread over 200,000 hectares of land — and no protected forests will have to be deforested for the new development, according to the planning minister.

That’s because the new capital will have at least 50 percent “open green space,” which includes recreational parks, a zoo, botanical garden, and sports complex “integrated into the natural landscape such as hilly areas and river systems,” Bambang said.

“The open green space won’t mean it’s cleared land, but an actual green area, and our concept is that of a forest city,” he said. “So as we build the new capital from zero, we will also restore the environment in Kalimantan. This is our strategy to ensure that the environment will not be disturbed as the development of new capital takes place.

“Our big commitment is that this won’t reduce the size of protection area forest in Indonesia,” he added.

Bambang has not shared with any outside environmental groups or experts what the concept of a “forest city” entails, or how it would be possible to create extensive urban space within a forested environment without disturbing the ecosystem.

The planning minister said the move would cost an estimated $33 billion, with the government intending to cover less than 10 percent of that and encouraging public-private partnerships to finance the bulk of the development costs. Some 1.5 million people, mostly civil servants, will move from Jakarta to the new capital.

President Widodo, center, visits a location in East Kalimantan province in July with regional government officials. Image courtesy of the East Kalimantan government.

Kalimantan is home to 37 million hectares (91 million acres) of tropical forest, about 7 million hectares (17 million acres) of which are designated as protected areas, according to the national statistics agency. Before its separation with North Kalimantan, East Kalimantan had the largest span of protected forest in Indonesian Borneo, covering more than 2.8 million hectares (6.9 million acres).

Indonesian Borneo, known as Kalimantan, is the third most populated region in the country, after the islands of Java and Sumatra (both of which are significantly smaller in size), and the government estimates the current population of about 16 million will increase by nearly a third to more than 20 million by 2035.

The region is home to indigenous communities whose lives revolve around intact forests, as well as to critically endangered species such as Bornean orangutans (Pongo pygmaeus).

But industrial-scale forest clearing in recent decades — for mining, logging, and oil palm cultivation — has threatened the well-being and lives of both human and animal inhabitants of Kalimantan. The extensive draining of the island’s peat forests to make way for agriculture has also rendered the organic-rich soil highly flammable. In 2015 alone, nearly half of the deforestation recorded in Indonesia, or nearly 800,000 hectares (2 million acres) of forest loss, occurred in Kalimantan.

A recent study evaluating large-scale road-building projects in Kalimantan, ongoing and planned, shows that they will fragment the forests further, threatening the forest corridors vital to the wildlife. Such a transformation, the authors say, is “worrisome” because the region hosts one of the world’s largest tracts of native tropical forest, spanning an area a quarter the size of Alaska.

The plan has also sparked worries it will exacerbate environmental and social problems in Kalimantan, which has a long history of deadly conflicts between the indigenous population and migrants from other islands. Indigenous rights activists warn there could be a surge in land grabs as speculators look to cash in on demand for land for the new capital.

Aerial view of a village in Kutai Kartanegara District, East Kalimantan province, on Dec. 18, 2017. Image by Nanang Sujana/CIFOR.


Alamgir, M., Campbell, M. J., Sloan, S., Suhardiman, A., Supriatna, J., & Laurance, W. F. (2019). High-risk infrastructure projects pose imminent threats to forests in Indonesian Borneo. Scientific Reports9(1). doi:10.1038/s41598-018-36594-8

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