Politics
Jakarta will remain an economic hub as Indonesia prepares to relocate its capital
JAKARTA (Reuters) – Indonesia's parliament granted special status to Jakarta on Thursday, keeping the metropolis as the country's economic epicenter, as part of plans to move the capital to the island of Borneo.
Indonesia plans to move its capital from congested and sinking Jakarta to Nusantara, a $32 billion city under construction in the jungles of East Kalimantan in Borneo.
The city is a flagship project of outgoing President Joko Widodo, who has pledged to redistribute wealth and development currently concentrated in Java across the archipelago.
An “agglomeration” council will be created to harmonize development plans between Jakarta and its satellite towns, according to a copy of the new law dated March 18 and seen by Reuters.
Interior Minister Tito Karnavian said after deliberation in parliament that Jakarta should be further improved to compete with other “world-class cities” once the seat of government is moved to Nusantara.
“Once it is no longer a capital, it still needs to be given special status so that it can accelerate economic growth and increase its contribution to the country's GDP,” he said.
Under current rules, Jakarta will remain Indonesia's capital until the president issues a decree officially naming Nusantara as the new capital, which is expected this year.
The government is expected to hold the 2024 Independence Day ceremony on August 17 in Nusantara and thousands of civil servants are expected to move there by the end of this year.
(Reporting by Stefanno Sulaiman and Stanley Widianto; Editing by Kanupriya Kapoor)
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