INDONESIA’S CAPITAL RELOCATION: THE CHALLENGE OF MOVING CIVIL
SERVANTS
Abstract
In early 2022, the Indonesian Government passed a bill regarding the relocation of their
capital city. However, even before starting this project, this decision has met a lot of challenges
and controversies, one of them being civil servants refusing to relocate to the new capital city.
Data and information being presented are mainly from compiled interviews and reports. Results
show that there are 3 main reasons why civil servants refuse to relocate: accessibility to facilities,
insufficient salaries and personal reasons. This paper concludes with the different solutions the
Indonesian government may implement to overcome these challenges which includes improved
housing and facilities and monetary incentives.
Keywords: Indonesia, Capital Relocation, Civil Servants
INDONESIA’S CAPITAL RELOCATION: THE CHALLENGE OF MOVING CIVIL
SERVANTS
I. Background
Jakarta, Indonesia’s Capital city, is both a political and economic hub for South-East
Asia. It is also one of the densest cities in the world and is home to more than 10 million people,
with an estimated 30 million in the greater metropolitan area, and there is an additional 1.38
million people who commute to Jakarta daily. This means that Jakarta faces huge volumes of
daily commuter traffic, resulting in worsening air quality and poorer quality of life. Jakarta is
also currently one of the fastest sinking countries in the world due to uncontrolled groundwater
usage and poor urban planning (Horman, 2020). Therefore, in 2019, President Jokowi Widodo
announced the transfer of the capital from Jakarta to East Kalimantan. The new capital city is
named Nusantara, which means “archipelago” in Javanese and will be located between the North
Penjam Paser Regency and Kutai Kartanegara Regency, East Kalimantan, on 256,143 hectares
which should accommodate around 1.7-1.9 million people by 2045.
Nusantara is a solution for reducing pressure on the current capital city, Jakarta, and for
distributing wealth across the country. Java is home to 60% of Indonesia’s population and
controls more than half of the entire nation’s GDP which is at least 58% of the total GDP (Salim
& Negara, 2019). Whereas eastern regions in Indonesia only accounts for 16.6% of national
GDP despite being 4 times bigger than Java. (Ibid.) Furthermore, Jakarta is currently facing a
number of environmental burdens such as air pollution caused by traffic; water pollution due to
inadequate sanitation; the city is also currently sinking due to pumping underground water.
According to the minister of Public Works and Public Housing, Basuki Hadimuljono,
Nusantara will become a “future smart forest city” that pays attention to environmental aspects.
75% of the capital city would be green open space, of which 65% will be a protected area and
10% is mainly for food production. Nusantara will include different important buildings that will
move from Jakarta to Nusantara such as the Presidential Palace, Ministerial offices and
conference centers. Brand new government offices and residences will also be built for around
1.5 million civil servants.
However, despite thorough planning, the Indonesian government’s plan to move capital
cities has met all sorts of problems. One of the biggest challenges is the attitudes of the civil
servants with regards to this capital relocation. In a survey conducted by the Indonesian
Development Monitoring in 2019 showed that 94.7% of 1,225 respondents who were apart of the
governmental staff were not in support of this decision. (Salim & Negara, 2019)
II. Who is Moving?
The capital relocation plan will be divided into 3 different phases. The first phase of the
project is scheduled to start in 2022 until 2024, with development extending to 2045. The first
phase will start by Mid-2022 with the construction of priority infrastructure such as the
Presidential Palace and Ministerial offices. State institutions of the government will be relocated
gradually, starting with the defense, home and foreign ministries, and the State Secretariat by
2024. Around 25,000 civil servants would be relocated each year. The government aims to
relocate all ministerial personnel and civil servants by 2045.
Moving civil servants first will allow Indonesia to fully establish the soon to be built
capital city and would also solidify the standing of the new capital city. According to President
Jokowi, this construction of the new capital city would not just be a physical move of
government offices, but the goal is to build a new smart city that is competitive at the global
level. Therefore, non-civil servants such as businessmen will also have to relocate to the new
capital city in order to increase economic activity, allowing Nusantara a global competitive city.
III. Challenges in Moving
3.1 Affordability of Moving Capital Cities
According to President Jokowi, building the new capital is expected to cost Rp 466
trillion (approx. US$ 32.1 billion), 19 percent of which will be covered by the state budget and
the rest from public-private partnerships and private investments. However, the COVID-19
Pandemic has depleted the government’s resources and at the moment, state budget is mainly
being used for healthcare and economic recovery due to the pandemic. If the government were to
shift the spending on the new capital city, it’s inevitable that state budget allocation for other
sectors, such as the health sector, would decrease.
Finding investors has also become an issue. There have been quite a number of investors,
like Saudi Arabia and the United Arab Emirates, who are willing to invest into this project.
However, these deals have not been fixed. SoftBank, a Japanese company, was willing to invest
up to US$ 30 billion dollars, which is a huge portion of the initial development cost. In early
March 2022, Softbank announced that they would withdraw and exit from Indonesia’s capital
relocation project. This leaves the Indonesian government scrambling to look for other investors.
3.2 Environmental Concerns
Although moving capital cities has its advantages, especially when it comes to relieving
human burdens, but many critics are concerned of how this relocation could result in negative
effects on the environment and has the potential to collapse the delicate ecosystem in East
Kalimantan, especially during the early stages of the new capital city’s development.
Furthermore, despite envisioning Nusantara to be a “green city”, but creating an economic city
which provides a good quality of life for the people also means that there will be large hidden
costs of consumption that may affect the ecosystem, environment and the indigenous people.
The Island of Borneo is one of the largest remaining forested areas in South-east Asia, it
is also rich in all sorts of valuables resources such as oil, timber, fishers, etc. and is home to all
sorts of floras and faunas, including the famous orang-outans. Therefore, East Kalimantan plays
a large role in the Earth’s ecosystem. However, in recent years, East Kalimantan has undergone
extensive deforestation due to palm oil palm plantations, illegal deforestation and forest fires.
Research have shown that in a span of 17 years, from 2000 to 2017, about 6.014 million hectares
of the forest have been lost due to deforestation (CIFOR, 2019). Big corporates have also
obtained official permits to cut down forests for mining activities and from 2000 to 2017,
Industrial plantations in East Kalimantan increased by 170%, covering almost 6.20 million
hectares of land (Ibid.) Therefore, many are concerned about how moving the capital city and
economic activity to East Kalimantan may accelerate deforestation and resource extraction.
(BBC News, 2019; Cassidy & Hamzah, 2019)
3.3 Security Concerns
The new capital city, Nusantara, will be located between North Panjem Paser and Kutai
Kartanegara, which is a strategic location as it lies in the center of the archipelago. However, this
also means that the new capital city will directly face the Makassar strait, one of Indonesia’s
archipelagic sea lanes that Indonesia has designated for international navigation routes. Security
concerns have been raised because archipelagic sea lanes allow foreign vessels including
commercial vessels, warships and submarines to navigate freely along this strait. In order to
alleviate this problem, the Indonesian navy is planning to build a new base that is equipped with
the newest technologies. The Indonesian government has also enforced Government Regulation
No.37/2002 on the Indonesian archipelagic sea lanes (Darmawan, 2022) , but critics are
concerned that this regulation alone is not enough to alleviate concerns regarding maritime
security as the law does not exactly touch on the violations against the archipelagic sea lanes
agreement.
The new capital city is also directly adjacent to Malaysia, whom Indonesia had several
disputes over territorial boundaries. In 1969, the Indonesian and Malaysian government entered
into an agreement on the continental shelf boundaries and territorial sea boundaries on the
Malacca strait and a portion of the South-China Sea. However, this treaty did not specify
Indonesia’s Exclusive Economic Zones. In 1985, Indonesia ratified the 1982 United Nations
Conventions on the Law of the Sea (UNCLOS) which states that the Exclusive Economic Zones
of a country may extend up to 200 nautical miles offshore. This means that Indonesia is entitled
to approximately 14,000 more square kilometer miles of waters. (Yuniar, 2022). Both countries
have different views on maritime region borders as the Malaysian government believes that
Indonesia should use their treaty as a measuring tool for the Exclusive Economic Zones. This
disagreement has led to several disputes such as the military standoff in 2005 as both countries
claimed the same part of the Celebes Sea to be their own. Therefore, Indonesian diplomats must
be more skilled in carrying out diplomacy with Malaysia and be able to reach an agreement as
soon as possible.
Furthermore, the capital relocation will require the government to move all civil servants
and military personnel by air or by sea. Analysts have noted that a high number of military
troops and a significant number of resources must be deployed. Approximately US$ 8.2 billion,
which is more than three-fourths of Indonesia’s Defense Ministry’s Budget, will be needed in
order to establish this new military command and support the relocation of civil servants and
military personnel. (Umar, 2022). This resource allocation may possibly highly affect
Indonesia’s ongoing defense and modernization plans as Indonesia’s focus would more likely
shift from developing their defenses and military to the security demands which arises due to the
capital relocation.
3.4 Land Procurement and Land Ownership
There are challenges in terms of land procurement as majority of the land appointed for
the new capital city is already owned by palm oil plantations, timber, mining companies and
government elites. For example, the Indonesian Chamber of Commerce and Industry said that
the new capital city will occupy the land that is mostly owned by a conglomerate founder of
Royal Golden Eagle manufacturing group, Sukanto Tanoto and in 2019, the government assured
that there won’t be an issue with regards to land procurement and ownership because Sukanto
Tanoto was given an “Industrial Plantation Forest” license, meaning that ownership can be taken
by the government at any time. However, up until March 2022, the government is still working
on identifying and verifying land ownership and has not been able to procure the land.
3.5 Attitudes of Civil Servants and Governmental Staff
In a survey conducted by the Indonesian Development Monitoring from early to midAugust 2019 showed that 94.7% of 1,225 respondents who were apart of the governmental staffs
were not in support of Indonesia’s capital relocation plans. (Salim & Negara, 2019). On February
25 2022, the Indonesian government held a webinar regarding the capital relocation, Usman
Kansong, the director general of Information and Public Communication, has acknowledged that
there are civil servants who do not want to be relocated to the new capital city and some even
asked him If they could be transferred to become a provincial civil servant in Jakarta instead.
Many senior civil servants have also been considering early retirement from the office. There are
several reasons for the lack of support but it is mainly due to accessibility to facilities,
insufficient salaries and personal reasons.
3.5.1 Reasons for the Lack of Support
3.5.1.1 Accessibility to Facilities
In an interview done in March 2022 by Kiki Siregar, a civil servant said that he has a
child with special needs and his child would need special treatment. So, he is worried whether
the new capital city will have the facilities his child requires. Most of the top ranking high
schools and prestigious universities such as Universitas Indonesia are located in Jakarta, making
the quality of education much higher in Jakarta as compared to other cities. Therefore, many
civil servants who are parents are worried about their children’s education when they are to
relocate to a new capital city.
3.5.1.2 Insufficient salaries
The average salary of a civil servant in Indonesia ranges from about Rp2 million (approx.
US$137) – Rp5 million (approx.US$340) (Jamal Shaid, 2022), depending on which level they
are on the hierarchy. When compared to working in the private sector, there is quite a big
difference between the average salary of a private office worker and the salary of a civil servant.
Moving to a new capital city will not only cost a lot of money for the government but also for the
civil servants themselves personally. Furthermore, due to several reasons such as education
background, having no examination standards, etc. (Ali and Kusmana, 2022). Many civil
servants have lesser chances of earning a promotion to increase their salaries. Therefore, many
are afraid of whether or not they are able to afford to relocate to the new capital city.
3.5.1.3 Personal Reasons
Since Indonesia is an archipelago and Nusantara and Jakarta are on different islands, an
airplane is needed to go from Jakarta to Nusantara and vice versa. Therefore, many government
servants are worried about the distance and travel time as many have already built their lives in
Jakarta. The sudden move and decision has also affected the mentality of those civil servants
who are being forced to relocate their entire lives. As what MR Maulana, a CEO of a Jakartabased psychology firm, said in 2022, “it’s (moving civil servants) not just offering job
opportunities, housing, facilities, etc. It (the government) must understand the mentality of
personnel who are directly affected by the relocation” (Siregar, 2022)
IV. How to increase incentive amongst civil servants
4.1 Housing and facilities for Employees
During the first phase of construction, the Public works and Housing Ministry will start
building residential areas for the civil servants. It is expected that 100 thousand houses will be
built in Nusantara to accommodate approximately 320,000 people by 2045. (Nugraha, 2022).
However, how the government will build such facilities, the affordability and quality of the
facilities is still in question, making civil servants feel uneasy about relocating to the new capital
city.
4.1.1 Malaysia an Example
Around the 1980s, Malaysia’s Prime Minister then, Mahatir Mohomad, proposed to move
the national’s administrative capital from Kuala Lumpur to a newly built city, Putrajaya. This
move was decided in order to enforce national identity and gain global recognition. All federallevel government ministries, civil servants and their families had to be relocated to the new
capital city and in order to solve the problem of housing, the federal government decided to build
government housing on either multi-level apartments, double-level link terrace housing, or semidethatched double story chalets and double story bungalows for higher ranking officers.
However, what made Malaysia’s housing system unique is that they introduced ‘fenceless
housing’ (Mahmoud et al., 2018). Just like what the Indonesian government is planning to do,
the Malaysian government allocated a precinct specifically for civil servants called Precinct 9. In
the precinct, the government provides all sorts of public facilities such as clinics, schools, public
markets, religious facilities, etc. The housing system in Precinct 9 means that there are no
concrete fences between the terrace housing, promoting a sense of community. The Indonesian
government could adopt Malaysia’s housing system as an incentive for civil servants to relocate
to the new capital city.
4.2 Monetary Incentives
One of the main worries of many civil servants when relocating to a new capital city is
affordability, especially since Nusantara is planned to be a “smart and green” city, civil servants
would need to spend more on eco-friendly items such as smart cars or solar panels. Therefore, in
order to increase incentive amongst the civil servants, the government can provide monetary
incentives to civil servants in terms of free housing or bonuses.
V. Conclusion
Although there is good reason behind the Indonesian government’s decision to move the
capital city from Jakarta to Nusantara, but this has created much controversy amongst the
Indonesian people and especially the civil servants. This plan to move the capital city will also
face countless of challenges in a number of aspects from financial challenges to challenges that
arises from civil servants. However, with the right solutions, the Indonesian government would
be able to overcome these challenges and create not only a green and sustainable city, but a
ground-breaking city that would be competitive in a global level.
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