should the capital city of indonesia be moved?

Category : Adventure | Posted On Apr 21, 2017

President Joko "Jokowi" Widodo's request to the National Development Planning Agency, or Bappenas, to do a feasibility study on moving the country's capital from Jakarta since the city has grown too overcrowded has received a mixed response from the business community.

Indonesian Chambers of Commerce and Industry, or Kadin, an influential business lobby group, is worried by the idea, arguing that businesses — most with headquarters in Jakarta — need to consult and lobby the government on a regular basis.

"The business community will support the government's program if it benefits the people, but is this the right time to move the capital, when our economy hasn't yet fully recovered?" Sarman Simanjorang, Kadin Jakarta deputy chairman said on Thursday (13/04).

Hariyadi Sukamdani, a veteran businessman and the chairman of the Indonesian Employers Association (Apindo), said he would not object if the government plans to relocate the capital city.

"When that time comes [to move], information technology will already be much better than today. It won't matter that much [to be away from Jakarta]," he said, adding that he doubts the move would happen soon.

Hariyadi said moving the capital is costly, even if one just considers the cost of moving government officials and legislators to the new capital, and there is no guarantee that it will work to even out income inequality across the county.

Andrinof Chaniago, a public policy analyst at the University of Indonesia and a former national development planning minister, said moving the capital may cost about Rp 10 trillion ($754 million) per year — to be paid for by the state budget — over at least 10 years.

The number is relatively small, equivalent to about 0.5 percent of the Rp 2,081 trillion allocated for government spending in the 2017 State Budget and 2.9 percent of the total government budget on payroll at Rp 343 trillion.

"From the fiscal point of view, moving the capital city shouldn't be a problem," Andrinof said, adding that the government already has a program to develop 10 regional cities into megacities.