Will Arab, Japanese cash help Indonesia’s Joko Widodo realise his capital dream?

Past presidents have considered relocating the capital, but with foreign investments on his side, Jokowi’s effort could well succeed

Observers say it’s likely a done deal, but warn the government’s move to East Kalimantan will not solve Jakarta’s many woes, including traffic and pollution

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Indonesian President Joko Widodo wants to move the capital to East Kalimantan. Photo: EPA-EFE

Published: 9:30am, 19 Jan 2020Updated: 9:37pm, 19 Jan 2020

For decades since its independence from the Dutch, successive Indonesian presidents have called for the country’s historic capital, Jakarta, to be relocated.

It was mostly political banter – the costs involved were mind-boggling – but no longer, it seems.

President Joko Widodo, just weeks after being sworn in for a second and final five-year term last October, announced his intention to flee the pollution, floods and traffic jams of Jakarta, whose centuries-old colonial buildings still stand in the north end near the old port, and make a fresh start on vacant ground in Borneo.

Unlike past presidents, however, Widodo has something to back his bet: money. The Indonesian president concluded a two-day visit this week to the United Arab Emirates, during which he secured pledges of around US$23 billion in investment, mostly for infrastructure and energy projects around the nation, but also for his grand new capital, in Borneo’s East Kalimantan Province.

On Friday, Luhut Pandjaitan, the trusted Coordinating Minister for Maritime Affairs and Investments, said Japan’s SoftBank Group had offered to invest US$30-40 billion in the new capital. He said he would meet SoftBank CEO and founder Masayoshi Son in Davos and Tokyo before Widodo made a decision in February.