Mr. Widodo said, the new capital city, which has not yet been named, will be in the middle of the vast archipelago nation and already has relatively complete infrastructure because it is near the cities of Balikpapan and Samarinda Mr. Widodo said the decision was made not to move the capital elsewhere on Java because the country's wealth and people are highly concentrated there and should be spread out.
Last month during an interview, Mr. Widodo said he wants toseparate the center of government from the country's business and economiccenter in Jakarta. he couldn't continue to allow the burden on Jakarta and Javaisland to increase in terms of population density, Economic disparities betweenJava and elsewhere would also increase.
Jakarta is an archetypical Asian mega-city with 10 million people, or 30 million including those in its greater metropolitan area. It is prone to earthquakes and flooding and is rapidly sinking due to uncontrolled extraction of ground water. The ground water is highly contaminated as are its rivers. Congestion is estimated to cost the economy $6.5 billion a year. Mineral-rich East Kalimantan was once almost completely covered by rainforests, but illegal logging has removed many of its original growth. It is home to only 3.5 million people and is surrounded by Kutai National Park, known for orangutans and other primates and mammals.
Mr. Widodo added the relocation of the capital to a 180,000-hectare (444,780-acre) site will take up to a decade and cost as much as 466 trillion rupiah ($32.5 billion), of which 19% will come from the State budget and the rest will be funded by cooperation between the government and business entities and by direct investment by state-run companies and the private sector.
Decades of discussions about building a new capital on Borneo island moved forward in April when Mr. Widodo approved a general relocation plan. He appealed for support for the move in an annual national address on the eve of Indonesia's Independence Day on August 16.