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Indonesia rolls out US$32.79bn plan to shift capital to Borneo

Indonesia president Joko Widodo has plans to move the country’s administrative capital from Jakarta to East Kalimantan, Borneo to relieve strain on the former city, according to multiple media reports such as CNBC and The Guardian. Widodo reportedly  said in a TV broadcast that the move seeks to tackle Jakarta’s population density, severe traffic jams, as well as air and water pollution.

The relocation plan is said to cost US$32.79 bn, though the state will only fund 19% and gather the rest from public-private partnerships and private investment. A bill will be drafted for the project and presented in parliament.

According to Widodo, about 54% of Indonesia’s population or 150 million people, currently resides on the island of Java which is where Jakarta is located. It currently contributes for 58% of Indonesia’s GDP. Meanwhile, Borneo is an island it shares with Malaysia and Brunei, and Kalimantan is the section belonging to Indonesia. The locale was chosen as it is the “centre of Indonesia and close to urban areas”, said the news reports.

As Borneo is the home for many protected rainforests and wildlife, the move has raised concerns from many environmentalists. However, Widodo has said that the new capital will be a “smart, green city”  with positive environment impact.

Indonesia is not the only country that has decided to shift its capital. Malaysia has shifted its capital from Kuala Lumpur to Putrajaya, while Myanmar’s has moved from Yangon to Naypyidaw.

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