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Indonesia’s New Capital: Why Nusantara Is Replacing Jakarta
- Jenn & Leon
- Jul 8, 2023
- 9 min read
Updated: 3 days ago
Indonesia has announced that it will move its capital from Jakarta to the island of Borneo in 2024.
The new capital, which will be called Nusantara, will be located in the province of East Kalimantan.
So why is Indonesia making such a drastic decision?
Let's take a closer look at the reasons why this is happening.
Jakarta has been the capital of Indonesia since December 27, 1949, when the country gained its independence from the Netherlands.
However, the city has been a major political and economic center in the region for much longer.
The city was originally founded by the Sundanese kingdom of Pajajaran in the 13th century as Sunda Kelapa.
In 1619, the Dutch East India Company (VOC) captured the city and renamed it Batavia.
Batavia became the capital of the VOC's Indonesian possessions and grew into a major commercial center.
After Indonesia gained its independence in 1949, the city was renamed Jakarta (translated to 'the perfect victory') and became the capital of the new republic.
Jakarta has continued to grow and develop in the years since and is now one of the most populous cities in the world.
Read on for more information on the current situation in Jakarta, why such a drastic decision is being made, and the pros and cons of this major undertaking in Indonesia.
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What is the Current Situation in Jakarta?
With over 270 million people, Indonesia is the fourth most populous country in the world.
Its capital, Jakarta, has a population of around 10.56 million people.
However, if you include the surrounding metropolitan area, the population of Jakarta rises to an incredible 35 million people spread across 255 square miles.
This makes Jakarta the largest urban area in Indonesia and the second-largest in the world, only a few million behind Tokyo in Japan.
When Was Indonesia's New Capital, Nusantara, Announced?
Joko Widodo, the president of Indonesia, made a drastic announcement in 2019: The capital of Indonesia will move to Kalimantan, on the island of Borneo, not far from where we just visited in Balikpapan (at the time of writing).
The new capital, to be named Nusantara, is twice the size of New York City and is touted to be a futuristic green city.
It will be centered on forests and parks, with green rooftops, tree-lined avenues, and a focus on biking and walking.
Food production will utilize renewable energy resources, while “smart” waste management and recycling will also be a cornerstone of the project.
By no means a finished article, construction will be ongoing with a plan for completion by 2045—Indonesia’s 100th anniversary.
The government plans to inaugurate Nusantara on August 17th next year—Indonesia’s Independence Day.
⪢ The Jakarta Timeline
● 1619: The Dutch East India Company (VOC) captures Sunda Kelapa and renames it Batavia.
● 1942: Japan occupied Batavia during World War II.
● 1945: Indonesia declares independence from the Netherlands. Batavia is renamed Jakarta and becomes the capital of the new republic.
● 1966: Jakarta is declared a "special capital region" (Daerah Khusus Ibukota) with a status equivalent to that of a province.
● 2019: The Indonesian government announces plans to relocate the capital of Indonesia from Jakarta to a new city in East Kalimantan, Borneo.
● 2024: Nusantara is inaugurated on August 17 (although the site remains an active construction zone).
Why is the Capital Being Moved From Jakarta?
The decision to move the capital was made in response to several challenges facing Jakarta, including overpopulation, pollution, and rising sea levels.
Jakarta is one of the most densely populated cities in the world, and one can easily experience that just by spending a few hours trying to travel around the city.
Jakarta is also heavily polluted, with air quality that is often considered to be in the unhealthy range almost daily.
Indonesia also wants to spread its economic development.
Currently, most of Indonesia's economic activity is concentrated on the island of Java, where Jakarta is located.
The government wants to move the capital to Borneo to help spread wealth and improve conditions in other parts of the country.
Just How Congested is Jakarta?
Jakarta is not the most congested city in the world, but it is up there.
In 2022, Jakarta was ranked 29th out of 389 cities in the world for traffic congestion, according to the TomTom Traffic Index.
This means that drivers in Jakarta can expect to spend an extra 22 minutes and 40 seconds on average to travel 10 kilometers.
The most congested city in the world is Bengaluru, India, with a traffic slowdown of 71%.
Other cities that are more congested than Jakarta include Mumbai, India (67%); Bogota, Colombia (65%); and Lima, Peru (64%).
Many factors contribute to traffic congestion in Jakarta, including:
⪢ Rapid Population Growth
Jakarta's population has more than doubled in the past 30 years, and the central city is now home to over 10 million people.
This has put a strain on infrastructure and led to increased traffic congestion.
⪢ Poor Public Transportation
Jakarta's public transportation system is not very efficient, and many people rely on private cars and motorcycles to get around.
This has led to more cars on the road, which has exacerbated traffic congestion.
⪢ Motorcycles & Scooters
There are an estimated 16 million motorcycles in Jakarta, Indonesia.
This is more than the number of cars in the city, and it makes motorcycles the most popular mode of transportation in Jakarta.
There are some reasons why motorcycles are so popular in Jakarta. First, they are relatively inexpensive to buy and operate.
Second, they are very maneuverable, which makes them ideal for navigating the city's congested streets.
Third, motorcycles are seen as a status symbol in Indonesia, and many people own them for social reasons.
The popularity of motorcycles in Jakarta has several negative consequences.
They contribute massively to traffic congestion, and many drivers perform dangerous and reckless maneuvers.
Also, there is a distinct lack of testing, training, and license enforcement, and many people take to the roads with no experience at all.
This can lead to accidents, which are sadly often fatal, particularly as motorcycles are more vulnerable to injury than cars.
Jakarta ranks 7th for the most traffic accidents in the world, averaging nearly 30,000 fatalities a year.
Motorcycles are also a major source of pollution, and many are poorly maintained/serviced in Jakarta, contributing massively to the constant haze that covers the city.
The Indonesian government is taking steps to address the negative consequences of motorcycle use in Jakarta.
For example, the government has implemented several measures to improve traffic safety, such as installing speed bumps and traffic cameras.
The government is also working to promote public transportation and is investing heavily in the city's MRT system.
⪢ Poor Road Infrastructure
Jakarta's roads are in extremely poor condition, a chronic problem in the city. In a 2022 survey by the World Economic Forum, Jakarta ranked 138 out of 140 cities for road surface quality.
This makes it difficult for traffic to flow smoothly, damages vehicles, and is a major factor in the accident rates plaguing the city.
The Indonesian government has taken some steps to improve road surface quality in Jakarta, such as increasing the budget for road maintenance and developing new road construction technologies.
However, more needs to be done to address the underlying factors that contribute to Jakarta's poor road surface quality.
Is Jakarta Sinking?
Perhaps more worrying than the pollution, congestion, and public transport issues is that Jakarta is sinking.
It is sinking at an alarming rate, primarily due to the excessive extraction of groundwater.
This problem has also been exacerbated by Jakarta having been built on a swampy delta.
This is causing flooding, pollution, and other problems.
Astonishingly, one-third of the city could be submerged by 2050. Jakarta has been described as the world's most rapidly sinking city.
Why Borneo?
The new capital, Nusantara, is being built on a site that is much less densely populated and has a more favorable environment.
When completed, it will span 1,600 square kilometers and will sit on a plateau that is about 1,000 meters above sea level (negating any sinking issues such as those in Jakarta).
The area of East Kalimantan is also home to several natural resources, including timber and coal.
Nusantara will also be in a more central location in Indonesia, which will help to reduce the economic and political imbalance between Java and the other islands of the country.
The government has said that the new capital will be a "sustainable forest city" that is designed to be environmentally friendly.
The city will be built around a series of lakes and rivers, and there will be a focus on public transportation and green spaces.
The move of the capital is a major undertaking, and it is estimated to cost around $33 billion.
However, the government believes that the benefits of moving the capital outweigh the costs.
The new capital is expected to boost economic growth and create jobs, and it will also help to reduce the pressure on Jakarta.
The move of the capital is a bold one by the Indonesian government, and it will be interesting to see how it plays out in the years to come.
Are There Any Downsides to Moving from Jakarta to Nusantara?
The move of the capital could lead to social unrest, as people are forced to leave their homes and businesses in Jakarta.
There is also a concern about the potential negative impact on the environment, as the new city is being built in a rainforest area.
The area is also home to endangered wildlife, such as orangutans.
The government insists that these will be protected and has ring-fenced areas of conservation.
Easily Find Hotels in Jakarta and Beyond
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Final Thought
We have spent time in both Borneo and Jakarta, and it will be fascinating to watch this move play out.
The problems facing Jakarta are both obvious and significant, and tackling these now could potentially save the city from oblivion.
It does feel like the right call, although we both do hope that the government follows through on its aims of creating a green and sustainable city in Borneo.
It is such an incredible island, and preserving its ecosystem and environment will be critical. The potential benefits will be huge, both for Nusantara and Jakarta.
The social upheaval will be significant too, not least in that some may not want to leave Jakarta, and some may not want Borneo to undergo such significant change and development.
We trust that the government will handle this carefully and respect citizens in both areas throughout this process.
Given our experience of the incredibly kind nature of Indonesians as a whole, we do have a strong belief that this will indeed be the case.
One of our biggest strengths as humans is our ability to learn from our mistakes and learn from our past.
If Indonesia's ambitious plans deliver on that, it will be something that not only benefits Indonesia but the planet as a whole.
FAQ: Indonesia’s New Capital – Nusantara
What is Nusantara?
Nusantara is the planned new capital city of Indonesia, currently under construction in East Kalimantan, Borneo.
It’s set to replace Jakarta as the administrative capital to relieve overcrowding and environmental stress.
Why is Indonesia moving its capital from Jakarta?
Jakarta is sinking, overpopulated, and prone to severe flooding and traffic congestion.
The move to Nusantara is aimed at creating a more sustainable, resilient, and well-planned city from the ground up.
💡 Jakarta will remain the financial and commercial hub, while Nusantara will handle government and administrative functions.
When will Nusantara officially become the capital?
The target is 2024–2025 for the initial move, with government offices and key ministries relocating first.
Full development is expected to continue into the 2030s.
Where exactly is Nusantara located?
It’s being built between the cities of Balikpapan and Samarinda, in East Kalimantan province, on the island of Borneo.
This location was chosen for its central geography, lower disaster risk, and available land.
What does “Nusantara” mean?
“Nusantara” is an ancient Javanese term that roughly means “archipelago”—a poetic and inclusive name that reflects Indonesia’s identity as a nation of islands.
Who is designing and funding Nusantara?
The city is being planned by both Indonesian and international architects with a focus on green infrastructure, smart city tech, and eco-living.
It’s funded by the Indonesian government and private investments, including international partnerships.
Will tourists be able to visit?
Eventually, yes. Nusantara will feature green parks, cultural centers, monuments, and museums and is intended to be a model city.
But as of now, it’s mostly a construction zone with limited infrastructure.
How is Nusantara being built differently?
It’s designed as a “forest city,” prioritizing renewable energy, electric transport, and low-emission buildings.
Over 60% of the area will remain green, and wildlife corridors are part of the master plan.
Will people be forced to relocate?
The government has committed to minimal displacement, but some indigenous communities have raised concerns about land rights and environmental impact.
Compensation and social integration efforts are ongoing.
Is Nusantara the first country to move its capital?
No. Other nations have relocated their capitals before—for example:
● Brazil (from Rio to Brasília)
● Nigeria (from Lagos to Abuja)
● Kazakhstan (from Almaty to Astana/Nur-Sultan)
Nusantara follows this trend for similar reasons: decentralization, environmental planning, and symbolism.
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