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The Indonesian parliament has approved a bill on Jan. 15 to move the country's capital from Jakarta in the island of Java, to East Kalimantan in Borneo, Reuters reported.

Name chosen from 80 options

The new capital city will be located in two regions which are next to each other -- North Penajam Paser and Kutai Kartanegara.

The country's president, Joko Widodo, more commonly known as Jokowi, has also picked "Nusantara" as the name of the new capital.

He reportedly chose the name out of 80 options, as it reflects Indonesia's geography, the country's national development planning minister, Suharso Monoarfa, said, according to The Guardian.

Delayed due to Covid-19

The plan to move Indonesia's capital from Jakarta to East Kalimantan was first announced in 2019.

However, the construction of the new capital was delayed due to the Covid-19 pandemic.

According to Reuters, Jokowi did not give a timeframe for the finalisation of the project.

Until a presidential decree is issued, Jakarta will remain as the country's capital city.

Reuters reported that the mega-project costs US$32 billion (S$43.2 billion).

The newly passed state capital law on Jan. 15 will provide the legal framework for the funding and governance in developing the new capital.

Reuters further reported that the initial phase of the move will begin from 2022 to 2024, prioritising the construction of roads and ports to enable access into the city.

Jakarta sinking about 25 centimetres a year

According to The Guardian, the move was decided as the Indonesian government hopes to ease the burden on Jakarta, a city with a population of 10 million, which is infamous for its traffic congestion and flooding.

Kalimantan is almost four times bigger than Java but 60 per cent of Indonesians live in Java.

Jakarta is also one of the fastest sinking cities in the world due to the over-extraction of groundwater, with parts of North Jakarta sinking about 25 centimetres a year.

With the relocation of the country's capital, the Indonesian government also hopes to redistribute wealth -- the country's wealth remains in Jakarta, with Java's economic output accounting for more than half of the country's GDP from January to March last year.

More than half of Indonesia's economic activity is also concentrated in Java island.

Jokowi picked Nusantara as new name for capital

Nusantara is a Javanese term for archipelago.

However, critics pointed out that the new name will be confusing as the term "nusantara" can also be referred to the archipelago nation as a whole, The Guardian reported.

Others also questioned the reasoning behind choosing a Javanese term for the new capital when it will be located in Kalimantan.

Environmentalists flagged concerns

According to The Guardian, environmentalists warned that the move would hasten pollution in East Kalimantan.

The move would also cause the destruction of rainforests, which is home to many wildlife species, including orangutans, sun bears and long-nosed monkeys.

Nonetheless, the new capital aims to be a low-carbon "super hub" and promotes sustainable growth beyond Jakarta, Reuters reported.

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Top images via Aeira G on Unsplash and screenshot from President Joko Widodo/YouTube