Where China fits in Jokowi’s plan for Indonesia’s US$33 billion new capital city

President Widodo’s US$33 billion plan to relocate the centre of government from Jakarta will require the construction of much infrastructure

Chinese companies have already established their interest, and the provincial governor has welcomed them – but will Indonesian workers lose out?

Reading Time:6 minutes

Published: 8:45am, 19 Oct 2019Updated: 2:39pm, 18 Dec 2019

While President Joko Widodo’s plan to move the capital of Indonesia from Jakarta to East Kalimantan has its supporters and detractors, one thing is certain – the government is not going to bear the entire US$33 billion cost on its own. But how much investment will the project get from China?

According to East Kalimantan governor Isran Noor, Indonesia is open to foreign investments, including from Beijing, to help it build infrastructure in the new capital city, which will straddle an area of 180,000 hectares between the regencies of Kutai Kartanegara and Penajam Paser Utara.

We need to create a deal that puts no burden on the government’s shoulders

East Kalimantan governor Isran Noor

However, he said, the deal must be balanced for both sides and provide employment for local workers.

“To me, Chinese investment is very important because we need it to build infrastructure and other facilities to fulfil the people’s needs,” Isran said. “But most importantly, we need to create a deal that puts no burden on the government’s shoulders.”

Funding for development in the new capital was set to rely more on deals with state-owned and private enterprises, either domestic or foreign, than on Indonesia’s own state coffers, the governor said.

East Kalimantan, a province in the middle of the archipelago, is home to 3.5 million people and an abundance of natural resources, including oil and gas, timber and oil palms.

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Where China fits in Jokowi’s plan for Indonesia’s US$33 billion new capital city

President Widodo’s US$33 billion plan to relocate the centre of government from Jakarta will require the construction of much infrastructure Chinese companies have already established their interest, and the provincial governor has welcomed them – but will Indonesian workers lose out?

President Widodo’s US$33 billion plan to relocate the centre of government from Jakarta will require the construction of much infrastructure

Chinese companies have already established their interest, and the provincial governor has welcomed them – but will Indonesian workers lose out?