Indonesia parliament passes Bill on new capital, paving the way for construction to begin

JAKARTA: The Indonesian parliament passed a bill on the country’s planned new capital in eastern Kalimantan on Tuesday (Jan 18).

This means that the construction of the new capital can soon begin, ahead of the planned relocation from the current capital of Jakarta starting 2024.

Speaking in parliament, House of Representatives Speaker Puan Maharani asked lawmakers whether the draft law on the new capital can be approved and passed into law.

Members of the meeting supported the Bill with only the Prosperous Justice Party opposing it.

The Bill said that the new capital will be named Nusantara as announced by National Development Planning Minister Suharso Monoarfa on Monday.

The name Nusantara, meaning archipelago in Indonesian, was instructed and confirmed by the president, Mr. Monoarfa revealed.

Mr. Monoarfa further explained the reasoning behind the naming in parliament on Tuesday.

"Nusantara describes a concept of the geographical area of Indonesia with islands united by the ocean.

"It acknowledges the geographical plurality and (different) cultures. Thus, Nusantara is a unified concept that accommodates Indonesia's wealth and plurality," said Mr. Monoarfa.

He also said that the new capital will be governed by a special regional government which is equivalent to the provincial level.

Speaking at a press conference in parliament shortly after the Bill was passed, Minister of Finance Sri Mulyani said that there are five stages to develop the new capital. She said that the first stage from 2022 to 2024 was the most critical. The last stage has to be completed by 2045.

In the first stage, authorities will focus on the most crucial developments such as access to the new site by building roads and alternatively ports.

"From 2022 to 2024 we will focus on the priorities ... We understand that we are still facing the COVID-19 pandemic and recovery, and these will continue to be our priorities. But the new capital development can also be categorised as an economic recovery (project)," said Mdm Mulyani. 

The plan to build a new capital started in 2019 when President Joko Widodo announced that the country’s capital would move from megacity Jakarta to the remote regency of Penajam Paser Utara and Kutai Kartanegara in East Kalimantan province.

Authorities claimed the move is vital to save sinking and congested Jakarta and develop Kalimantan as well as the eastern part of Indonesia since most of the economic activity in the country has been centered in Java where the current capital is.

The construction of the 466 trillion rupiahs (US$32 billion) new capital project was supposed to start in 2020.