July 2019

The Future of Jakarta; a case Study of Malaysia and

China
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DO WELL DO GOOD
• Jakarta currently faces heavy and heaving problems that mainly revolves around air
pollution, overpopulation, and ground sinkage

• Indonesian government deems that Jakarta is no more a good fit as a capital with all its
problems. They have decided to move the capital to the island of Kalimantan.

• With the action of moving the capital to Kalimantan, this may bring positive impacts and
improve conditions that are currently faced by Jakarta

• The question is, will all the ’may’ turn into ’can’? Can Jakarta’s problems really be
solved by capital move?

• In 1999, Malaysia moved its capital from Kuala Lumpur to Putrajaya to fix congestion
and pollution problem in Kuala Lumpur, but the result isn’t so effective

• Until now, Government of Malaysia didn’t really find its way through of solving
overpopulation in Kuala Lumpur, even after the inception of Putrajaya

• Land subsidence also can’t really be solved by mere capital shift; More than 50
countries, including China, experience land subsidence are mainly caused by bad
governance and excessive water use

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 Jakarta currently faces heavy and heaving problems that mainly
revolves around air pollution, overpopulation, and ground sinkage

Jakarta Sinkage Area Below Sea Level Jakarta Population(in Million)

12.5 13.8
11.3
10.6

2019 2020 2025 2030

2nd Most Populous urban area in the world

AQI1 Index (2018)

168 168

91 91

36
>5 Meters Below Sea Level

0-5 Meters Below Sea Level Jakarta Ho Chi Manila Kuala Singapore
Minh Lumpur
Sources: BBC Indonesia, Airvisual
1AQI: Air Quality Index Copyright ©2019 ShARE. All Rights Reserved 3
 In the hope of solving all the problems stated above, Indonesian
Government have decided to move the capital to the island of
Kalimantan.

Indonesia’s New Capital:

North Penajam Paser, Why North Penajam Paser is chosen:
East Kalimantan

Geographic factor:

• Within reachable distance from two of Kalimantan’s urban cities (66.5 km to

Balikpapan and 170km to Samarinda)
• Located in an area that’s safe from natural disasters (far from the Ring of
Fire2)
• Located in the central/middle of Indonesia

Economic Factor:

• Sufficient infrastructure from its surroundings, such as highways and public

transportation
• Big economic potential as Penajam Paser is rich with natural resources such
as gas, oil and minerals
• 7 Billion regional government budget in 2018 with 80% generated from
natural resources sector

Sources: Kompas,
IDN Times (Interview with the Governor of East Kalimantan)
2Ring of Fire: area in Pacific Ocean where many eruptions occur
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 With the action of moving the capital to Kalimantan, this may bring
positive impacts and improve conditions that are currently faced by
Jakarta

Positive impacts that Jakarta may acquire with capital shift

• Reduce air pollution in by 23% Jakarta due to lowered congestion* quoted

•Environment from Ali Berawi, Urban development researcher from Universitas Indonesia
• More probability of construction of green spaces in Jakarta replacing
unused Government’s buildings

• Predicted to be able to lower population density in Jakarta to less than

•Demography 15.084/km2
• Predicted to be able to lower congestion by 20 – 30% in Jakarta * quoted
from Ali Berawi, Urban development researcher from Universitas Indonesia

• Predicted to be able to boost productivity with lowered congestion

•Economy • Redistribution of 58,68% of Indonesia’s GDP which are contributed by
Jakarta to other regions

Source: Kompas (2019), WRI Institute (2019) 5

The question is, will all the ’may’ turn into ’can’? Can Jakarta’s
problems really be solved by capital move?

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 In 1999, Malaysia moved its capital from Kuala Lumpur to Putrajaya to
fix congestion and pollution problem in Kuala Lumpur, but the result
isn’t so effective

The shift of capital doesn’t

20.4 really fix any of Kuala

Lumpur’s congestion
problems as the number of 77,2
Millions private vehicle increases by
around 40% and Air Pollution
Number of registered
Index that measures how
polluted the air of a region Air Pollution index of Kuala
private vehicle in Kuala Lumpur in 1999 (Year of
Lumpur in 1999 (Year of increases also by around
capital shift)
capital shift) 17%

This happens because

government of Malaysia
28.2 didn’t really focus on public
transportation development 90,8
Millions as it only accounts for 20%
of transportation journeys
in Kuala Lumpur
Number of registered Air Pollution Index of Kuala
private vehicle in Kuala Lumpur in 2019
Lumpur in 2019

Source: The Guardian, PJOS: Air Pollution Index in Malaysia (2014) Copyright ©2019 ShARE. All Rights Reserved 7
 Until now, Government of Malaysia didn’t really find its way through of solving
overpopulation in Kuala Lumpur, even after the inception of Putrajaya

Population of Kuala Lumpur (in Millions)

1.8
This happens because, during the
inception of Putrajaya, the
1.02 government didn’t really implement
0.89 any incentives that can attract
people to move to Putrajaya. The
government only focused on
0.41
0.25
0.27 moving its bueraucrats and its civil
0.2
servants

1950 1960 1970 1980 1991 2000 2018

Capital move to Putrajaya

As we can see, capital shift didn’t necessarily

stop the rapid population growth of Kuala
Lumpur

Source: The Malaysian Reserve (2017), The Economist (2018) 8

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Land subsidence also can’t really be solved by mere capital shift;
More than 50 countries, including China, experience land subsidence
mainly caused by bad governance and excessive water use

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