As part of its initiatives of Indonesia Vision 2045, the Indonesian government has planned to relocate the capital city from Jakarta to Kutai Kartanegara Regency and Penajam Paser Utara (PPU) Regency in East Kalimantan province. The authors first show that East Kalimantan’s superior socioeconomic performance compared to other Kalimantan provinces has led to significant intraregional disparities. The study then advocates that Kalimantan provinces should capitalise on the relocation benefits and leverage the National Strategic Project (PSN) for balanced regional development.

East Kalimantan stands out as a strong candidate for the future capital due to its impressive socioeconomic achievements. However, the study points out that the Kalimantan region faces several challenges contributing to regional disparities, including low labour productivity, limited financial inclusion, fiscal sustainability issues, and subpar education quality in border areas. East Kalimantan has consistently been in Indonesia’s top five since 2013, while its counterparts, like South, North, Central, and West Kalimantan, have struggled to reach or stay in the top ten.

Given the disparity, the authors analyse developmental challenges in each province, drawing insights from East Kalimantan’s experiences. West Kalimantan, ranking near the bottom in regional competitiveness, serves as a key example. Its suboptimal educational quality significantly impedes its growth. In 2022, enrolment in lower secondary and upper secondary education in the region has fallen dramatically to 93% and 69%, respectively, both below the national average. To combat this, the West Kalimantan government is promoting initiatives through the West Kalimantan Education Quality Assurance Centre (BPMP), including a quality assurance system for education. The paper suggests that West Kalimantan could benefit from East Kalimantan’s approaches, such as the establishment of integrated schools and enhancing teacher qualifications.

The authors emphasise that while addressing key issues, provinces should also capitalise on opportunities from the capital relocation, including existing national and regional projects. North Kalimantan should leverage the Indonesian Green Industrial Zone, while Central Kalimantan could enhance its agricultural output through the Food Estate Programme. West Kalimantan, on the other hand, might focus on improving export-import efficiency and logistics through its ports. For South Kalimantan, infrastructure enhancement is crucial, especially given its large airport and proximity to East Kalimantan, making it integral to the capital move. The study highlights the benefits of developing a railway network in South Kalimantan to support infrastructure growth and boost tourism in the area.

The study concludes that each province shall address the development issues as early as possible and should leverage its unique strengths to maximise the benefits of the capital city relocation. By swiftly addressing the specific issues of each province and strategically executing relevant initiatives, there’s potential to reduce the developmental disparity between East Kalimantan and the rest of the Kalimantan provinces.

By XU, Ni Scarlet

Researchers: KURNIAWATI, Hilda and ZHANG, Xuyao