Indonesia to move capital city out of crowded Java Island

Indonesia's president has decided to move the capital of the world's fourth most populous country away from the crowded main island of Java, but has yet to finalize a new location, the planning minister said on Monday.

President Joko Widodo's decision comes less than two weeks after private pollsters said he had won an April 17 presidential election, although official results are not due until May 22.

His challenger, Prabowo Subianto, has also claimed victory. "The president chose to relocate the capital city to outside of Java, an important decision," Minister Bambang Brodjonegoro told a news conference after a cabinet meeting.

Brodjonegoro said the administration had yet to pick a new location, but was looking at the eastern side of the sprawling archipelago.

At the opening of his cabinet meeting, Widodo stressed the need for new thinking about the future.

"We want to think in a visionary way for the progress of this country and moving the capital requires thorough and detailed preparation," he said.

The current capital, Jakarta, is home to more than 10 million people, but around three times that many people live in the surrounding towns adding to the area's severe congestion.

Brodjonegoro put the annual economic loss due to traffic congestion in Jakarta at 100 trillion rupiah ($7.04 billion).

The low-lying capital is also prone to flooding and is sinking due to over-extraction of ground water.

In making his decision, Widodo had also taken into account the fact that nearly 60 percent of Indonesia's 260 million people live in Java and economic activities were concentrated there, Brodjonegoro said.

During the recent election campaign, Widodo promised to spread economic development more evenly outside Java.

The planning minister did not estimate the cost of moving the capital but said the president had ordered the finance ministry to come up with a financing scheme that allowed participation of private investors.

He said moving the capital could take up to 10 years, citing examples such as Brazil and Kazakhstan.

One of the contenders for the new capital city is Palangkaraya in Central Kalimantan province on the island of Borneo, state news agency Antara reported this year.

Authorities there had prepared 300,000 hectares of land in case it is chosen as a new government hub, Antara said. ($1 = 14,200.0000 rupiah)

(Source: Reuters)

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