Indonesia Will Build A New Capital

INDONESIA

Hard Rise

The leader of the fourth-most-populous country in the world, Indonesia, has big plans.

President Joko Widodo recently tapped former British Prime Minister Tony Blair, billionaire SoftBank founder Masayoshi Son, and Abu Dhabi’s crown prince, Sheikh Mohammed bin Zayed Al Nahyan, to lead a blue-ribbon committee overseeing the construction of a new $34 billion capital city for the archipelago nation straddling the Indian and Pacific Oceans, the South China Morning Post reported.

The announcement came after the president – widely known as Jokowi – also secured $23 billion in investment for infrastructure projects during a visit to the United Arab Emirates, Reuters reported.

In those meetings, Sheikh Mohammed expressed interest in property that he might develop. “The crown prince asked for an island with cool air and nice beaches,” said Indonesian Maritime and Investment Affairs Minister Luhut Binsar Pandjaitan, according to the Jakarta Post. “He really wants to invest there.”

Indonesia’s current capital, Jakarta, is sinking. Its buildings are slowly settling into soft, swampy land while the waters of the Java Sea and 13 rivers crisscrossing the city rise due to climate change. By 2050, around 95 percent of the city will be underwater, the BBC explained.

Jokowi also expects to raise $20 billion through a sovereign wealth fund, Reuters wrote. The largest Muslim-majority country in the world, Indonesia is banking on Gulf foreign investment to boost the nation’s growth of 5 percent in recent years. That number would be impressive for most developed countries but has lagged behind Asia’s two other giants, China and India.

He also expects to spend money on defense, including potential submarine purchases to address “geopolitical and geo-strategic” issues, according to Turkey’s Anadolu Agency.

Indonesia and China have been at odds over their claims to islands in the South China Sea. As Asia Times wrote, a combination of resolute naval displays and savvy diplomacy led to Indonesia fending off an incursion of Chinese Coast Guard and fishing vessels into its economic territory. That story also detailed a host of new Indonesian military purchases.

In World Politics Review, Joshua Kurlantzick issued some words of caution. Jokowi is doubling down on building the economy but has not tasked himself with political reforms that will help keep that economy strong in the long run. His government is a mix of veteran, sometimes corrupt politicians and younger reformers and technocrats. Some cabinet members have close ties to powerful business leaders. It’s not clear if everyone will put his agenda above their own.

Indonesia is fractious, but it’s a country of the future.