The peculiar pitch of Indonesia raises some concerns

[ASEAN NOW Content Team]

 

The unusual suggestion comes after Japan's SoftBank decided not to invest in a $32 billion project.

After a key investor declined to sponsor the $32 billion proposal, detractors ridiculed it and raised doubts about ownership of the proposed city. Now, Indonesia is considering crowdfunding the relocation of the country's capital.

The unusual suggestion was revealed on Monday, when the head of the government agency in charge of the project told local media that the alternative is being considered after Japan's SoftBank Group Corp declined to invest in the project.

 

Bambang Susantono, the head of the Nusantara National Capital Authority, said, "We will examine all creative finance models."

More than two years after Indonesia's investment minister, Luhut Pandjaitan, declared the business had pledged $40 billion for the initiative, SoftBank stated it will not be involved earlier this month.

 

Pradarma Rupang, the president of the Mining Advocacy Network in East Kalimantan, where the new capital is proposed, voiced fear that any crowdfunding initiative will be dominated by profit-driven corporations.

"As a result, I'm not sure if these donors will receive anything in return."
"Are they going to be shareholders?"
Al Jazeera spoke with Rupang.
"How will these contributors be compensated?"

 

It would also be unrealistic, according to Rupang, to expect the general people to foot the expense.

"Taxes, pricey schooling, and other fees have strained the community, and the government has cancelled gasoline subsidies," he stated.
"In addition, people are paying for their own healthcare, especially now that the government has lost control over the COVID-19 pandemic."

 

In August 2019, the Indonesian government revealed intentions to relocate the capital from Jakarta to East Kalimantan, a remote region of eastern Borneo.
Jakarta is sinking due to illegal groundwater extraction, stifling smog, overcrowding, and chronic traffic congestion, according to the administration of Joko "Jokowi" Widodo.

1.5 million of Jakarta's 11 million population would be evacuated under the plan to an undeveloped jungle location chosen for its pure air, huge open space, and remote from natural disaster-prone areas.

 

Only roughly 20% of the estimated $32 billion cost of the relocation plan will come from state coffers, leaving the private sector or other governments to make up the difference.
The administration has been seeking investment from the Middle East since the idea was unveiled, with five countries thought to be in talks to offer cash.

The Asian Development Bank stated earlier this month that it would help raise cash for the new capital, but that it would not commit any direct funds or loans.

"The ADB will share international lessons learned to assist the Nusantara National Capital Authority in designing and funding the new capital," said Ahmed M Saeed, a spokesman for the ADB.

 

Crowdfunding is a method of financing a business initiative that is commonly utilised by individuals and small businesses. It involves asking modest donations from a large number of people.
Some crowdfunding schemes include "rewards" such as merchandise or firm shares, blurring the distinction between charitable contributors and investors.

Sri Murlianti, a political science instructor at East Kalimantan's Mulawarman University, said the government's strategy is becoming a burden for the people at a difficult time.

"It's hard enough for them to afford cooking oil and other basic essentials; now they'll have to pay for the new capital as well?"
"It's a shambles," she said to Al Jazeera.