In August 2019, Indonesian President Joko Widodo formally proposed moving the country’s capital from Jakarta to a yet-to-be-built city in the province of East Kalimantan.
Indonesia’s previous presidents had suggested similar moves for the capital and the cause is clear. Home to nearly 30 million people, Jakarta’s infrastructure cannot handle it. And it shows.
But hope is not lost. The new capital city will take some of the burden off Jakarta, as government workers and other sectors relocate there. Vacated government buildings in Jakarta will then be transformed into green open spaces and heritage sites.
To prevent a second Jakarta from being born, the new capital city will use an eco-friendly development model that will have strong, forward-looking, and sustainable infrastructure put in place from the beginning.
With the concept of a ‘forest city’, at least 50 percent of the new city will comprise parks and gardens, which will be built into the natural landscape of hilly areas and river systems. The government has also pledged to invest billions of dollars to protect the forests and wildlife as the city is built and the capital is moved. That means no deforestation will be permitted, nor wildlife harmed in the process — Kalimantan will remain in its pristine, natural state.
President Jokowi has also assured that renewable energy will primarily be used to meet the electricity needs of the new city — a particularly promising plan because Jakarta relies heavily on coal power; if the new city did too, it would pose an environmental hazard to the existing greenery of Kalimantan.
Mass public transportation will be electricity-based, and waste management policies will gear the new capital city to become a zero-waste city.
Indonesia’s new capital and Jakarta will be made more sustainable for the long run. It is a good sign for the future and will bring forth new long-term investment opportunities in Indonesia. At Eastspring Investments, we too integrate environmental, social and governance (ESG) considerations in all our investment processes. Learn more about us at www.eastspring.com.