Indonesia passes law on new capital, paving way for relocation from Jakarta

[JAKARTA] Indonesia's parliament passed the legislation governing the administrative capital on Tuesday (Jan 18), paving the way for the world's largest archipelago to relocate its capital city to Borneo.

The new capital will cover a main area of 56,180 hectares in East Kalimantan province, according to the new law passed by parliament on Tuesday. It also states that the capital has a special administrative status that will allow the president, with approval from parliament, to appoint its head, scrapping the need for an election often marred by fierce political battles.

The new legislation gives the 489 trillion rupiah (S$46 billion) project the legal basis to proceed before the 2024 presidential election.

Indonesia, which had contemplated moving the capital for decades, would be the third country in South-east Asia to relocate their capital cities. Next-door neighbor Malaysia moved its administrative capital to Putrajaya in 2003 and Myanmar changed its capital to Naypyidaw in 2006.

BLOOMBERG