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Indonesia Moving Capital Out of Jakarta

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Indonesia unleashed a flood of announcements about moving its capital out of Jakarta, from a possible $40 billion from the world’s biggest tech investor, to a new advisory panel that includes former UK premier Tony Blair. Last week’s announcements were meant as a reassurance about the expensive move as Indonesia makes foreign investment a priority again. However one group that has not been reassured are environmentalists.

They say the cure may not be any better than the disease. The world’s fourth biggest nation is moving the capital because of climate change.
Jakarta is a polluted megacity sinking under the pressure of water pumping. However the next destination is Borneo, Asia’s biggest island, where the environment has been wracked by mines, plantations, oil spills, and forest fires to clear land for oil palms.
Environmentalists worry this strain will only worsen as millions arrive in Kalimantan, the Indonesian portion of the island shared with Malaysia and Brunei.“

Regardless of the rationale for the move, it is important to note that simply moving the capital out of Jakarta will not necessarily address mounting problems in the city,” the World Resources Institute said in a blog post. “Likewise, moving the capital to another city could heighten environmental and social impacts.”

The institute estimates that clearing the amount of land needed for a capital in Borneo would release 48 million tons of carbon dioxide, about the same annual footprint of 9.3 million drivers.

The social impact has been seen in other nations that decided to move their capitals. When Brazil moved the government from Rio de Janeiro to Brasilia, it printed money to fund the move, leading to a decades-long hyperinflation crisis with prices increasing 80% a month.
When Myanmar moved the government from Yangon to Naypyidaw, residents tended to stay put, leaving the new capital sparse.

Those are two problems Indonesia fears from the move — that residents will stay in an overcrowded Jakarta, and that the government can’t afford to build a capital in Kalimantan.

That’s why the nation is trying to reassure investors. In addition to Blair, the panel advising Indonesia about the capital move will include Abu Dhabi crown prince Sheikh Mohammed bin Zayed Al Nahyan and Masayoshi Son, the head of SoftBank, the world’s biggest tech investor.

The panel’s “role is to provide advice and promotion, and the most important thing is to build trust from the world internationally,”
Luhut Pandjaitan, Indonesia’s coordinating minister for maritime affairs and investment, said.

He also said Indonesia will study the environmental impact of its decision, particularly for the archipelago nation’s all-important fishing sector.“

[W]e will collect [data from] fisheries experts, the policy will come out after the study results come out,” he said.

Still environmentalists worry. They say hosting a capital city would threaten biodiversity in Kalimantan, where there are protected species like orangutans. And the island is already at the heart of several climate controversies. A global hunger for palm oil has motivated businesses to burn down ancient rainforests and plant palm trees.
Despite the government’s promised moratorium on planting licenses, these fires contributed to a 43% increase in deforestation in East Kalimantan in 2018 versus 2017, according to the World Resources Institute.

Critics also question whether an exit would diminish Jakarta’s traffic and overpopulation, which cause air pollution, water pumping, floods, land subsidence, and overall resource drain. Just this month, flash floods have killed at least 50 in the city and displaced more than 100,000.



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