President Joko Widodo with Governor of East Kalimantan Isran Noor during a visit to inspect sites for Indonesia’s new capital. (Photo: Agung / Indonesia Cabinet Secretariat)

Parsing Objections to Moving Indonesia’s Capital

Published

There are substantial and valid concerns about the government’s decision to move Indonesia’s capital to East Kalimantan. It should have taken these concerns into account.

Thirty months after the relocation of Indonesia’s capital was publicly announced, the process has become mired in controversy. There are growing criticisms and even objections against the plan to move the capital to Penajem Passer Utara, East Kalimantan. A recent petition against the relocation has surfaced, and a majority of respondents in a survey disagreed with plans to move the capital.

The relocation is driven mainly by President Joko ‘Jokowi’ Widodo’s idea of ‘Indonesia-centrist’: a development vision that seeks to shift the epicentre of Indonesia’s economic growth from Java to the outer islands. Jokowi, as he is popularly known, believes that the relocation constitutes a key strategy for economic transformation. The country’s largest political party, the Partai Demokrasi Indonesia – Perjuangan (PDI-P), similarly argues that the vision parallels the one laid down by President Soekarno.

The plan was ultimately ratified through the National Capital Law (IKN Law) on 18 January 2022, and it was announced that the new capital will be named ‘Nusantara’ (archipelago). This is perhaps the most significant government agenda in recent Indonesian history, but it is not without reservations, despite the legal basis for the relocation. 

The IKN law appears to be a ‘reckless’ legislative process. The House’s first session on the IKN Bill began on 7 December 2021. It was passed on 18 January 2022, taking only 42 days. The process is far too quick for such a strategic policy. In addition, the hearing process lacks public consultation. Constitutionally, the IKN Law is prone to formal and material defects and violates statutory regulations, especially the provisions for forming laws based on the Constitution and Law No. 12/2011 on the Formation of Legislation (Pembentukan Peraturan Perundang-Undangan). 

The IKN Law becomes even more problematic because the background study supporting the relocation is lacking. The law consists of 11 chapters and 44 articles but the background study comprises only six chapters (in 175 pages), with two bibliography pages and 17 references. Even though the background study was publically diclosed, many academics and practitioners criticised it for having no fundamental philosophical and technical (including social, economic, technological, environmental) analyses. Yet, the government claims that rigorous study had been done. 

The perceived lack of rigorous background study and preliminary public consultation is the basis for two major concerns.

First, there are serious concerns about environmental impacts based on the Kajian Lingkungan Hidup Strategis (or KLHS, Strategic Environmental Assessment). Intriguingly, this was published after, and not before, the decision was made to move the capital. The concern is legitimate as Kalimantan — home to Indonesia’s tropical rainforests — has been degraded due to the expansion of mining and agri-business companies. Despite the Jokowi administration’s claims that the capital will be the greenest and most innovative city on earth, the historic relocation will threaten biological ecosystems and environmental sustainability

The government needs to consider the relocation of the capital from the perspective of policy priority, particularly amid the pandemic. There is a legitimate worry that the capital project will distract or even derail the government’s focus on handling the pandemic, supporting economic recovery, and prioritising future development plans.

Second, the capital relocation project might deepen economic inequality and trigger new social conflicts. Instead of creating equal employment opportunities and economic distribution, Bappenas (the Ministry of National Redevelopment Planning) estimates that by 2027, 127,000 civil servants will be relocated. This will involve relocating millions of Indonesians if their families are to follow them. Most of them are urban ‘upper-middle class’ citizens who will have to co-exist with the ‘lower-middle class’ of local residents and indigenous communities. There are at least 21 indigenous groups of more than 20,000 people spread across the region encompassing the new capital. Their lives will be impacted. The Betawi people, who have been marginalised due to Jakarta’s rapid growth, is a case in point. Their customary traditions and indigenous rights were impacted by the capital’s ‘big city’ culture. This lesson should not be ignored in the move to the new capital.

Reacting to the passing of the IKN law, the Kelompok Poros Nasional Kedaulatan Negara (or PNKN, National Axis for State Sovereignty) has filed a formal trial lawsuit to the Constitutional Court. They are challenging the law on several fronts, including substantial aspects of development planning documents, regulatory bases, financing sources, and the project implementation scheme. If successful, the law may end up with a fate similar to the Job Creation Law (UU Ciptakerja) case, which was ruled as ‘conditionally unconstitutional’ by the Constitutional Court. The latter was deemed to have procedural flaws in its formation, as it lacked sufficient consultation and would undermine worker rights and weaken environmental protection. 

From a wider perspective, the challenge against the IKN Law underscores a structural problem in Indonesia’s law-making process. First, the issue of the legislative process seems to be a persistent problem in Indonesia. This, as a result, will adversely affect the confidence of investors — or whoever is interested in taking part in the development of Nusantara. Second, the IKN project shows that the decision-making process in Indonesia has been carried out in the absence of evidence. Several other strategic infrastructure projects and key decisions were made without rigorous feasibility studies — the new Yogyakarta International Airport and the development of the Bener Dam in Central Java.  

The government needs to consider the relocation of the capital from the perspective of policy priority, particularly amid the pandemic. There is a legitimate worry that the capital project will distract or even derail the government’s focus on handling the pandemic, supporting economic recovery, and prioritising future development plans. The criticisms and objections against the relocation of the capital need to be understood as telling signals of unintended consequences. In hindsight, the government should have anticipated them, or better still, sought to mitigate such concerns. 

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Yanuar Nugroho is Visiting Senior Fellow, ISEAS – Yusof Ishak Institute.