Message from the President: Please Make Accurate Calculations

KOMPAS/DIONISIUS REYNALDO TRIWIBOWO

Minister of National Development Planning/National Development Planning Agency Suharso Monoarfa

National Development Planning Minister/ National Development Planning Agency (Bappenas) head Suharso Monoarfa said during a meeting with Kompas editorial staff at his office on Tuesday (2/3/2021) that the relocation of the country\'s capital city from Jakarta to East Kalimantan would be realized according to the plan.

The relocation of the nation\'s capital city is a key part in Indonesia\'s recovery program to cope with the impact of the pandemic and in realizing Indonesia\'s Vision 2045.

The national capital will be moved from Jakarta to an area that is administratively located in Sepaku district of Penajam Paser Utara regency and in the districts of Muara Jawa and Samboja in Kutai Kartanegara regency, East Kalimantan. Suharso said a number of conditions and preparations had to be made so that the relocation of the capital city would go according to plan.

Also read: New Capital to be Smart City

The following are excerpts from Kompas\' interview with Suharso and his assistants.

More than one year after the official announcement of the plan to relocate the nation\'s capital city, how is it proceeding?

Everything has run according to the plan. We are waiting for the ratification of the draft law on the relocation of the capital city (IKN). The groundbreaking [ceremony] will be carried out soon after the passing of the bill by the House of Representatives (DPR). Soil tests for the location of the state palace have been carried out. From that point, another vital baseline could easily be determined in a certain radius from the palace.

Everything has run according to the plan. We are waiting for the ratification of the draft law on the relocation of the capital city

Also read: Groundbreaking of New Presidential Palace may be Held this Year

(The bill on the relocation of the capital city was included in the 2021 National Legislation Program in late March 2021).

DOKUMENTASI BPJN KALTIM

Balang Island Bridge in Balikpapan Bay, East Kalimantan, which connects Balikpapan and Penajam Paser Utara.

How important is the relocation of the capital at present?

The National Development Planning Agency (Bappenas) has launched six strategies to push Indonesia\'s economic transformation in 2021, so that they can drive the country’s economy, which is now being affected by the pandemic.

The first strategy is to create competitive human resources in health and education as well as research and innovation. The second strategy is to improve the productivity of certain economic fields including industrialization, productivity of micro, small and medium enterprises, and agricultural modernization.

The third strategy is the green economy, which includes a low carbon economy, blue economy and energy transition.

Also read: New Capital City Designed for 100 Years

The fourth strategy is the digital transformation, which includes digital infrastructure, utilization of digital technology and the strengthening of “enablers”.

The fifth strategy is the integration of the domestic economy, including economic powerhouses with a focus on infrastructure connectivity.

The sixth strategy is the relocation of the capital city to create a source of new growth and balance out economic [development] among regions. The relocation of the capital is an agglomeration of the other five strategies, and in terms of the impact, I think it will be bigger.

What about the financing of the relocation of the nation\'s capital city?

The relocation of the capital city will be partly financed by the state budget, but the state budget will only account for 1 percent, while 99 percent of the funding will come from the private sector. The 1 percent from the state budget will be used as a stimulus for private investors, including state-owned and private companies, to take part in the relocation project.

Also read: Rome Not Built in One Day

What is the impact of the relocation in the short term?

Our target is that, by 2024, most of the facilities in the new capital will be ready for use, such as the state palace, government offices, some official houses and supporting facilities. Since 2020, regulatory and institutional preparations have been made, such as the preparation of the master plan, urban design and others. Physical construction projects will begin this year.

When the physical work begins, it will directly or indirectly have an impact on East Kalimantan. In the initial phase, around 100,000 houses will be built with 500,000 workers.

Our target is that, by 2024, most of the facilities in the new capital will be ready for use.

The materials and equipment for the development of the capital city will be brought in from other regions, such as North Kalimantan, South Kalimantan, Central Kalimantan, West Kalimantan, as well as Sulawesi, Nusa Tenggara and Bali. The employment of 500,000 workers is expected to replace the working hours lost due to the pandemic crisis in 2020.

(National Development Planning Ministry economic affairs undersecretary Amalia Adininggar Widyasanti added that the construction of houses and offices at the new capital city would contribute to the national economic growth rate by 0.2 percentage points on average a year and East Kalimantan\'s economic growth by 2.1 percentage points. It would also increase the economic growth of other provinces in Kalimantan and Sulawesi by between 0.1 and 0.3 percentage points.)

What is the long-term impact?

The relocation of the capital city will jump-start efforts to overcome the impact of the pandemic and to return to the trajectory of the Indonesian economy in realizing the Indonesian Vision 2045 to get out of the middle-income trap.

We want to increase the economic gravity not only in Java.

For this reason, the new capital will not only serve as the capital city but also as the center of clean industry and mark a shift of the economic growth center from western Indonesia to the eastern part.

We want to increase the economic gravity not only in Java but also, as President Joko “Jokowi” Widodo said, to become “Indonesia-centric” development.

In the future, Indonesia needs to be diversified, and East Kalimantan will become a strong economic base and can provide a cushion when future shocks occur.

The relocation of the capital city also encourages economic acceleration and growth through six economic clusters and two supporting clusters that will create 4.3 million to 4.8 million jobs in East Kalimantan in 2045.

In addition to existing industries, such as mining and plantation, industrial clusters that will be developed are clean technology industries, integrated pharmaceuticals, sustainable agricultural industries, ecotourism, chemical and chemical products (petrochemicals and oleochemicals), as well as low-carbon energy (biofuels, gasification), coal and synthetic fuels.

The development of the economic cluster relies on cooperation of three cities, namely Balikpapan, the capital city and Samarinda.

Kompas/Wawan H Prabowo

President Joko Widodo and the Governor of East Kalimantan Isran Noor visited the location of the candidate for the nation\'s capital in the Sepaku area, Penajam Paser Utara, East Kalimantan, Tuesday (17/12/2019).

How to deal with social and environmental impacts?

There are nine working groups to anticipate the impact of the development of the new capital. Apart from being in the middle of Indonesia and having the least potential for disasters, such as megathrust earthquakes, East Kalimantan, which is very heterogeneous and friendly to immigrants, has an added value in minimizing social impacts.

Since the beginning, there has been an identification of human resources and an inventory of their composition. Similar to Jakarta, the Javanese people account for the largest part of the population in East Kalimantan.

Currently, there are several months of preparation for the surrounding community to be able to work in the construction of various physical projects or economic clusters that will be developed. In our master plan, there is a strategy that accommodates this social aspect.

From the environmental point of view, part of the area for the new capital city will be reforested. The new capital city will cover an area of 256,142.74 hectares. About 65 percent of the area will comprise protected area and 10 percent as a food production area. Of course, animal protection is part of it. Of the 56,000 hectares which will become the core area of the new capital, 50 percent will consist of an open green space.

Also read: Moving the Capital

What kind of city will the new capital be?

The new capital city will be under the authority of a special agency that answers to the president. This agency will manage the 256,143 ha of the new capital city area, which will be included in the national electoral area but without a governor or regional legislative council (DPRD).

As a capita city, this new area will become a compact, efficient and circular city, the most livable in the world. With a population of 2 million in 2045, it has been designed in such a way so that its future infrastructure facilities have been included in its master plan. The water management will adopt the concept of a sponge city which will be in harmony with nature. The public infrastructure will enable the citizens to go on foot and use modern, environmentally friendly public transportation services. It will also become a smart city, which will enable to meet the demands of the Industry 4.0 era.

The new capital city will be under the authority of a special agency that answers to the president.

The new capital city will be the most livable city in the world. What is the toughest obstacle in realizing the relocation of the capital city?

The President\'s message is “please make correct calculations (in various aspects). On the other hand, the best way to restore the economy for the time being is to restore the people’s mobility, but not to trigger the spread of Covid-19. For that, vaccines are the key.

The mass vaccination needs to be accelerated and the health protocols should be consistently implemented in order to reduce the rate of new Covid-19 cases to below 1. If it can be reduced to below 1, the economic recovery as well as the relocation of the new capital can be carried out smoothly. However, this requires a sufficient supply of vaccines and vaccinators.

This is what we continue to pursue. I am optimistic that the relocation of the nation\'s capital city will be successful. On 17 Aug., 2024, President Jokowi is expected to be able to lead Indonesia’s Independence Day celebration in the new capital city.

This article was translated by Hendarsyah Tarmizi.