The Indonesian parliament is expected to pass a bill to turn the new capital into law in 2021, creating the legal basis for this $ 34 billion project to be implemented before the 2024 presidential elections. It is known that only 1/5 of the cost comes from the state budget used to relocate the capital, the rest comes from private funding (socialization).

The Indonesian government aims to build strategic buildings, basic infrastructure, develop transport systems and, most importantly, complete the new capital bill in 2021.

In the period 2022-2023, the construction of headquarters, civil servants, educational, medical and other infrastructures will be carried out. The first relocation phases will be carried out by 2024.

Under the plan, state institutions will be relocated in stages and this process could take 2-4 years. The central bank and the main offices of the Financial Services Authority will remain in Jakarta and make it Indonesia’s main commercial and financial center.

President Joko Widodo said the move would help spread economic activity outside the capital Jakarta, creating balanced development across the country.

The capital Jakarta has more than 10 million inhabitants with fully developed infrastructure. The island of Java, which includes the capital Jakarta, is now home to nearly 60% of the Indonesian population, contributing more than half to the country’s gross domestic product. Meanwhile, the province of East Kalimantan on the island of Borneo has only 5.8% of the population and 8.2% of the economy.

Widodo said this move is necessary when the capital is currently suffering from traffic congestion, frequent flooding and alarming pollution. Jakarta is sinking fast too, with two-fifths of its surface already below sea level and some provinces sinking at a rate of 20 cm per year.

Indonesia will be the third Southeast Asian country to transfer its capital. Prior to that, neighboring Malaysia moved its administrative capital to the city of Putrajaya in 2003, and Myanmar moved its capital to the city of Naypyidaw in 2006.

According to remonews.com