Skip to main content

Why does Indonesia want to move its capital city?

There are good reasons why Indonesia wants to move its capital city away from Jakarta, but any move faces significant obstacles. The main reason for wanting to move is that Jakarta is sinking. According to some estimates, 95% of north Jakarta will be underwater in 30 years time, impacting nearly 2m people. Other reasons why President Joko Widodo has proposed the move is to alleviate congestion and overcrowding. Relocating the capital would also boost development in some of the country’s poorest islands, a key government priority.

Subscriber content

Read this in full, free

Start a free trial and use one of your 10 free starter credits to unlock this piece.


Free. 10 articles. No card required.

By completing this form you are agreeing to our Terms and Conditions for the provision of a free trial of Capital Economics' services. We take your privacy seriously and will not share your details with others without your consent. By providing your details, including your email address, you are consenting to Capital Economics sending you macroeconomic commentary and analysis. You can unsubscribe at any time. See our Privacy Policy for more information.