Selasa, 22 November 2022

From Jakarta to Nusantara - what will it be?

This is an article I wrote some time ago for company's in-house magz. Before published, it has been edited by their editor. 

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Relocate Capital City of Indonesia : 

The Effect towards Winning’s Indonesia Business and as a Group

 

Its official !!!

The Draft Bill of Capital Relocation is signed on January and we will have a new capital named “Nusantara” (means ‘archipelago’). The plan of relocation is not a new thing for Indonesia. There have been some talks about moving the capital since 1957. The consideration at that time was location, as its far more extensive, and considerably safe from earthquake and volcanoes. Nevertheless, the reasons of moving at time being was far than just locations. It is strongly due to the safety, Jakarta’s overpopulation and environmental problem.

The chosen location is in East Kalimantan  - an area between North Penajam Paser Regency and Kutai Kartanagara. This has also underlined the fact that the Capital is NOT Java-centric. Geographically, its located in Kalimantan – an Island crossed by the Equator and not part of the volcanoes ring of fire. It is definitely far less populated than other big cities in Java, not to mention Jakarta itself.

Moving a capital is such a big issue. It carries enormous symbolic importance that one can imagine. Wealth distribution, geopolitics or more over, we may call it as equal distribution to the people.

Jakarta has many problems after years of massive development but lacked of proper arrangement as it has notorious congestion and repeatedly suffer from flood, without being underestimating but it is no longer a convenient place nor proper place to be called as a capital.

For Nusantara, the government is talking about of USD 33 billion for the projects – which will be funded not only by the government budget but also from the mixture of state-owned enterprises, public private partnership and private sectors. The new Capital first stage which is reforestation follow by basic infrastructure. The process will start this year and expect to be completed in 2024, before the election.

No one dare to say that it is an easy move. Moving the central government from one city into another, will have a huge impact sociologically to those who need to moved to the new place. It is estimated that at least around 10 thousand of state employees (with thousands more when we count their families) will have their offices in the new Capital. The process moving itself is expected to be completed at year 2045.

Meantime, Jakarta stays as Centre of Business, whilst most of the Ministry will be in the new Capital – over 2000 km away. And then, what will the plan be for the former capital? They said that since Jakarta will remain as Centre of Business, the local administrative government will focus in 3 (three) things which are public transport, public housing and flood preventive plan. We are yet to hear the plan before end of this year.

Another question raised from private companies, whether the plan will help boosting the business, or the other way around. To be clear, that businesswise, it will surely have impacts. We have received confirmation that Department of Transportation and Ministry of Finance will only move their Head Office in the 2nd batch, which is from year 2025 – 2029, both functional and essential departments. What about the supporting body such as Investment Coordinating Board, Central Banks and other Financial Institution?

Currently, most of the Ministries already have a so-called one-door integrated service, to cut the bureaucracy. It administered and coordinated by BKPM – Investment Coordinating Board. The one-door integrated service, or PTSP is an activity of administering a permit and non-licensing that receive delegation of authority from the agency that has the authority whose management process starts from the application stage to the stage of document issuance which is carried out in one place. In total, there are 25 permit & non-permit that can be arrange through this. During the pandemic, most were done through online application. BKPM itself, along with several Financial Bureaus will stay in Jakarta.

Ministry of Transportation – Department of Sea Transport would likely take the 2nd stage of moving their office to the new Capital. So far, they are working to make most of the permit release and extension, include certificates through their online system. During the pandemic, they have released a few policies related to the current condition and arrangement.

Like any other Logistic companies, we dealt with the two Ministries at the most. The new system that applies online – and the one-stop integrated services are not 100% better compare with the old system. However, it surely cut the line and direct interactions like in the old days. The biggest challenge for us as a corporation is to cope with the current regulations and prepared for some changes that may occur – starting from regulations, change of officers, change of authority and perhaps many more.

Trying to look at the bright side of the story, changes is a constant movement, and Winning experiences it all the time. Lets be adaptive,  do the best we can and make it happen – a Winning Way ! 

 

Note : The article is published in Wining In-house Magz, with some edited wordings. 
Credit belongs to Winning Group - not to be republished commercially. 

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