Explained: Why Indonesia will build whole new capital called Nusantara to replace ‘sinking’ Jakarta

In a landmark move, Indonesia has decided to change its capital city from Jakarta to Nusantara, a site deep within the jungle of the mineral-rich Kalimantan on Borneo island, after a bill seeking the same was approved by the country's parliament earlier this week.

Spelling out the five stages of development in Nusantara, Indonesia's Minister of Finance Sri Mulyani on Tuesday confirmed that the first state is slated to begin sometime this year. Reports suggest the new project is likely to cost around $32 billion.

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Reasoning the government's decision to change its capital city to Nusantara, Indonesia's President Joko Widodo said that the location is very strategic. It is in the centre of the country and close to urban areas. The president added, "The burden Jakarta is holding right now is too heavy - as the centre of governance, business, finance, trade and services." 

By relocating the capital to Nusantara, the Indonesian government hopes to redistribute wealth.

Why is Indonesia changing its capital?

Jakarta, home to 10 million residents, has been projected to sink in the next three decades as the capital city is prone to flooding due to climate change. Jakarta 'sits on swampy land' and is one of the fastest-sinking cities on Earth, the World Economic Forum (WEF) had earlier noted. 

Reports add Jakarta has been dropping into the Java Sea at an alarming rate due to the overuse of groundwater by home drilling. The megacity also suffers from chronic congestion and air pollution.

In 2018, Heri Andreas, who has extensively studied Jakarta's land subsidence for the last two decades at the Bandung Institute of Technology, told BBC that by 2050 about 95 per cent of North Jakarta would be submerged.

WATCH: Here's why Indonesia has replaced the 'sinking' Jakarta with new capital city #Nusantara. pic.twitter.com/xVpGU1ELFY

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Where is Nusantara located, and why was it chosen as Jakarta's replacement?

Nusantara, which means 'archipelago' in Javanese, is a deep site in the mineral-rich East Kalimantan, an Indonesian province on the Borneo island. The new capital will be based in North Penajam Paser and Kutai Kartanegara.

Indonesia's President Joko Widodo chose the new name, Nusantara, from more than 80 options presented. Indonesia's National Development Planning Minister, Suharso Monoarfa, told the Guardian that Nusantara was chosen because it reflected its geography and was iconic internationally.

While Jakarta will continue to serve as the nation's commercial and financial hub, the government administrative functions will move to East Kalimantan, about 2,000 km northeast of Jakarta. The National Planning and Development Agency notes that the total land area of Nusantara will be around 256,143 hectares, which is currently covered by dense forests.

Kalimantan is famous for its forests and orangutan population. Major mining activities are also undertaken in this area. According to reports, critics have argued that the construction of new capital Nusantara in Kalimantan, may expand palm-oil plantations and logging in an area rich in lush rainforests and diverse wildlife.

However, Planning Minister Bambang Brodjonegoro has assured that the 'existing protected forest' will not be disturbed and instead they will rehabilitate it.

Indonesia is, however, not the first country to change its capital. Countries like Brazil, Myanmar, Egypt, and Kazakhstan have shifted their capitals in the past.