Indonesia plans to move capital away from Jakarta

Indonesia’s president has decided to move the capital of the world’s fourth most populous country away from the crowded main island of Java.

The exact location is still to be decided, said the country's planning minister Bambang Brodjonegoro.

Jakarta has a population of around 10 million, with an estimated 30 million in the larger metropolitan area.

The island of Java is only the fourth largest in Indonesia but is home to more than 140 million people - more than half the country's population.

Palangka Raya on the island of Borneo is said to be favorite to take over as capital.

Authorities there had prepared 300,000 hectares of land in case it is chosen as a new government hub, local media reported.

President Joko Widodo’s decision comes less than two weeks after private pollsters said he had won an April 17 presidential election, although official results are not due until May 22. His challenger, Prabowo Subianto, has also claimed victory.

At the opening of his cabinet meeting, Widodo stressed the need for new thinking about the future.

“We want to think in a visionary way for the progress of this country and moving the capital requires thorough and detailed preparation,” he said.

Brodjonegoro put the annual economic loss due to traffic congestion in Jakarta at 100 trillion rupiah ($7.04 billion).

The low-lying capital is also prone to flooding and is sinking due to over-extraction of groundwater.

During the recent election campaign, Widodo promised to spread economic development more evenly outside Java.

The planning minister did not estimate the cost of moving the capital but said the president had ordered the finance ministry to come up with a financing scheme that allowed participation of private investors.

He said moving the capital could take up to 10 years, citing examples such as Brazil and Kazakhstan.