Indonesia’s New Capital On Hold Due To COVID-19 Impact

• 24 September 2020
• International News
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Indonesia’s multi-billion dollar plan to develop a new capital city on the island of Borneo have been formally put on hold as a result of the economic impact of COVID-19.

Indonesia’s Minister for National Development Planning, Suharso Monoarfa, told Reuters on 19 August that “We putting as our number one priority the recovery of the economy and overcoming the pandemic. When the situation improves, only then will we decide what we will do.”

The plan to move the capital Jakarta was expected to start in 2021 and was due to increased overcrowding, traffic congestion and flooding from poor urban planning.

Delays until 2022 or 2023 are now likely, including the construction of a new state palace, as well as upgrades of airports, harbours and access roads.

With Indonesia’s GDP contracting by 5.3% in Q2 2020, embarking on a project estimated to cost between US$33bn and US$48bn in the current economic climate is not seen as a priority.

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