The Relocation of Indonesia's Capital from Jakarta to Kalimantan (IKN) : A Strategic Leap or a Costly Gamble?

Indonesia's bold decision to move its capital from Jakarta to Nusantara in East Kalimantan has attracted global attention and sparked domestic debate. Supporters praise the move as a visionary step toward equitable development, while critics question the feasibility and long-term sustainability of this massive project. Moving the capital is not merely an infrastructure project---it has far-reaching consequences for economic balance, environmental conservation, and political administration. In evaluating whether the move to the Nusantara Capital City (IKN) is a beneficial strategy, it is important to assess its expected impacts. This essay argues that the move is a strategic necessity for Indonesia, offering three key advantages: relieving the burden on Jakarta, promoting economic decentralization, and facilitating the creation of a sustainable smart city for the future and an argument that the project poses risks to indigenous communities and the environment. 

The first significant advantage of moving the nation's capital is that Jakarta's infrastructure and environment will be less stressed.  Jakarta, Indonesia's capital since 1945, has been under a lot of stress.  Parts of the city are sinking at a startling rate of 10 to 25 centimeters year, making it one of the cities with the fastest rates of land subsidence in the world (Deltares, 2021).  In addition, the city frequently experiences flooding, bad air quality, and persistent traffic congestion.  The World Bank (2019) estimates that these problems cost Jakarta up to USD 6.5 billion annually in healthcare costs and lost productivity.  Furthermore, the city's infrastructure and sanitary systems are under a lot of stress due to its population of exceeding 10 million people (UN-Habitat, 2020).By relocating the capital, the Indonesian government aims to ease this pressure and redistribute population and administrative functions to a more stable region. As noted by Firman (2019), capital relocation can help relieve megacity stress and improve urban resilience in both the origin and the destination areas. 

The second benefit of Relocation of Indonesia's Capital is that it promotes economic decentralization and lessens Java-centered development.  The island of Java, which makes up only 7% of the country's total area but is home to nearly 56% of its population, has long been the focus of Indonesia's development (Central Statistics Agency, 2022).  Regional differences and a lack of investment in infrastructure outside of Java have been exacerbated by this imbalance.  The relocation to Kalimantan is a purposeful plan to establish new hubs for economic development in the archipelago's eastern region (Bappenas, 2020).  The idea that planned cities can spur industry diversification and regional development is supported by research by Henderson and Kriticos (2018).Additionally, East Kalimantan is rich in natural resources such as coal and timber, which can support new industries around the new capital. By investing in inter-island connectivity and fair resource distribution, the government aims to integrate peripheral regions into the national economy more effectively (ADB, 2021). 

The third benefit of Relocation of Indonesia's Capital is that the chance to create an intelligent, sustainable capital from the ground up.  IKN is intended to be a green, technologically advanced city, in contrast to Jakarta, which developed naturally with no urban planning.  Digitalized governance, integrated public transit, and renewable energy are highlighted in the master plan (Ministry of Public Works and Housing, 2021).  In keeping with Indonesia's climate pledges under the Paris Agreement, the city wants to achieve net-zero emissions by 2045 (UNFCCC, 2022).   Arup (2022), which participated in early design consultations, states that the city will make use of AI-based public services, smart grid technology, and effective water systems..Scholars such as Yuen and Kong (2021) argue that building a capital from scratch allows governments to incorporate resilience and sustainability principles more effectively than retrofitting older cities. In this way, IKN could become a model for future urban development in Southeast Asia. 

Critics argue that the project poses risks to indigenous communities and the environment. Kalimantan is home to vast rainforests and endangered species, and rapid urbanization could threaten biodiversity (WWF Indonesia, 2022). Indigenous groups have also raised concerns about land rights and cultural displacement (Sahabat Alam Indonesia, 2021). However, the government's response includes the implementation of inclusive zoning regulations and participatory land-use planning (Kompas, 2023). Additionally, the development of the IKN emphasizes the protection of 65% of the surrounding forest cover and the establishment of ecological corridors (Nusantara Capital Authority, 2022). If implemented transparently and responsibly, environmental and social risks can be minimized. 

In conclusion, although the relocation of Indonesia's capital to IKN is not without challenges, it offers a strategic solution to long-standing national issues. This relocation promises solutions to Jakarta's urban problems, promotes balanced regional development, and creates a sustainable city designed for future generations. Policymakers must remain vigilant in addressing socio-environmental issues, but the overall vision is in line with Indonesia's long-term development goals. Therefore, IKN should not be viewed as an expensive gamble, but rather as a transformative investment for Indonesia's future. 

Reference 

ADB. (2021). Indonesia Economic Prospects. Asian Development Bank. 

Arup. (2022). Designing Nusantara: A Smart and Sustainable Capital City. 

Bappenas. (2020). Nusantara Capital Master Plan. Ministry of National Development Planning. 

Deltares. (2021). Subsidence in Jakarta: A Global Hotspot.