Image by the Ministry of Public Works and Housing/IKN.go.id.
Despite widespread and growing scepticism, President Joko “Jokowi” Widodo recently insisted that plans to establish a new capital city named Nusantara in East Kalimantan will proceed. While critics have pointed to issues like the huge cost involved and its potential impact on local communities, one issue has not received much attention – the hierarchical and closed governance arrangements planned for the new capital.
Law No. 3 of 2022 on the National Capital was passed earlier this year, after just 43 days of deliberation, with minimal public consultation. The Law establishes a Nusantara Capital City Authority (Badan Otorita IKN) responsible for preparation, development and relocation to the new city, as well as governance of the new capital region.
This new law locates the new capital in a grey area in Indonesia’s decentralisation policy. The Nusantara Capital City Authority is on the same institutional level as a ministry, and the president directly appoints the head of the authority (much like he does other ministers), and the new capital will not have its own legislature. This means residents will not be able to choose their own local government; they will only be able to vote in the presidential and national legislative elections.
The capital city authority therefore bypasses the direct election of regional heads and local legislatures that was one of the key features of the decentralisation policy introduced after the democratic transition in 1998.
Part of the reason that the president favours these arrangements for the new capital is likely his prioritisation of the economy above most other matters. A businessman by nature, the president seems to want to regulate the capital city like a corporation.
One place Jokowi may be looking at for inspiration is the Malaysian Federal Territory of Labuan in Sabah. This small island, known as an offshore financial centre, is administered by the Labuan Corporation, which is responsible for providing public services and promoting economic investment. The corporation functions as the local government, and is supervised by the Malaysian federal government.
A hint that Jokowi may be following this logic is his selection of professionals to lead the new capital city authority. In March 2022, Jokowi appointed Bambang Susantono, previously an Asian Development Bank senior official, as the authority’s head, and Dhony Rahajoe, previously a senior director at property developer Sinar Mas Land, as deputy.
Another point of contention relates to the president’s direct appointment of these officials to lead the new capital city. The president presumably wants to avoid any political friction that might interfere with the implementation of his pet project. It is widely known that there has been tension between Jokowi and Jakarta Governor Anies Baswedan over the management of Jakarta. This has its roots in Anies’ defeat of Jokowi’s former friend and ally Basuki “Ahok” Tjahaja Purnama in the 2017 Jakarta gubernatorial election, a race where Anies was accused of courting the Islamists who led massive rallies against ethnic Chinese and Christian Ahok – and, at one stage, Jokowi himself.
Issues like traffic congestion, flooding, overpopulation, and management of Covid have since led to conflicts between the Presidential Palace and the Jakarta administration. By directly appointing the head of the capital city authority, Jokowi may be trying to ensure such altercations are avoided in the future.
While there has been surprisingly little protest over the direct appointment of local leaders in the new capital, it is even more surprising that political party members of the national legislature (DPR) did not question the fact that the new capital city will have no local legislature. Instead, the DPR hurriedly passed the Law on the National Capital without raising any objections – an indication of the influence that Jokowi has over his coalition (which now controls around 80% of seats in the DPR).
In lieu of a local legislature, the new capital city will have a “community forum” (forum musyawarah masyarakat) to represent the interests of the public. A previous draft presidential regulation described a “Community Representative Council” that would have acted in a similar way to the appointed “city councils” (dewan kota/kabupaten) that operate in Jakarta municipalities and are regulated by Law No. 29 of 2007 on the Governance of the Jakarta Special Capital City Region.
The original Nusantara Community Representative Council would have had 17 members representing the different elements of the East Kalimantan community. But there was no guarantee that this appointed council would have provided fair and equal representation to locals. Many nearby indigenous peoples have complained they have not been sufficiently involved in the capital city plans, and fear they will be forced from their ancestral lands.
There is also the challenge of defining who is considered a ‘local’ in East Kalimantan, given that many migrants who moved there as part of government transmigration policies have now been living there for decades. And rather than acting as a legislature, this council would have been more like a consultative body, with no power to issue policy or supervise the governor of the new capital.
In any case, when the draft regulation was eventually passed in April as Presidential Regulation No. 62 of 2022, the council had been removed, and community participation was reduced to a vague “community forum”. The already weak stipulations on the membership of the council had been deleted altogether. It is hard not to reach the conclusion that the government is seeking to avoid any meaningful public oversight of the capital city administration.
The direct appointment of local leaders and lack of legislators in the governance arrangements for the new capital region shows how the central government deploys semi-authoritarian principles under the guise of efficiency and meritocracy. As matters stand, the new capital city would be administered like a semi-governmental institution.
It may be true that construction of the new capital will benefit from the ability for swift decision making, but removing genuine public participation ensures that the new capital city will not be a city for all Indonesians. Instead, it looks like the new capital city will serve the interests of political and business elites and the people who back them.
