Jakarta, originally built on a swamp, is sinking by up to 20 cm a year while the Java Sea has already risen by 8cm since the city was built in the 16th century. At the current rate, most of northern Jakarta will be underwater by 2050.
As the city cannot ultimately be saved as nature takes its inevitable course, the answer was simple: move the capital instead 2,000 km to the east to a new purpose-built home in East Kalimantan on the island of Borneo. The new coastal capital with plans for five satellite towns will occupy about 2,500 square kilometers, making it almost as large as Paris.
Construction has already begun, with plans to complete the initial phase by 2025, and start moving over inhabitants from the most threatened parts of Jakarta. A budget of USD 34 billion has been allocated to creating a ‘green city’ with plenty of open spaces, electric-based transport, and solar-powered housing.
However, it has also produced the equally inevitable sustainability issues of environmental damage in the new location, led by extensive deforestation. Borneo is one of the most biodiverse places on Earth and home to some of the last pristine tropical rainforests.
The initial phase of construction has already run into problems over future supplies of electricity and water. Hydroelectric power cannot generate enough to serve an influx of millions of people, so three new coal-fired power plants are planned. This comes at a time when the UN has called for coal to be phased out as an energy source to combat climate change.
Meanwhile, Indonesia was already the world’s largest exporter of thermal coal that is abundant on its archipelago of islands, and has issued 1,500 mining permits in East Kalimantan spanning more than 50,000 sq. km. – an area bigger than Belgium. This is set to exacerbate both the environmental destruction and the country’s contribution to global warming at the same time.
“Indonesia’s problems reflect how difficult it can be for many emerging economies to meet their most pressing and manifold challenges in a sustainable way,” says Max Schieler, author of the RobecoSAM Country Sustainability Ranking (CSR).
“Indeed, sustainable development consists of a complex and well-balanced relationship between economic growth, social progress and environmental conservation. Certainly, Indonesia’s socio-economic performance over the past two decades has been impressive, with millions of people lifted out of poverty, and per capita income doubled.”
“However, this economic success has come at a high environmental cost, as all the natural resource-based activities, such as agriculture, forestry, fishery and mining put severe pressure on ecosystems, reflected in Indonesia’s mediocre ranking (92 out of 150) for the environmental dimension in the CSR. This also indicates a need for the country to tackle these environmental pressures if it is to avoid putting its economic achievements and its population’s well-being at risk.”
The content displayed on this website is exclusively directed at qualified investors, as defined in the swiss collective investment schemes act of 23 june 2006 ("cisa") and its implementing ordinance, or at “independent asset managers” which meet additional requirements as set out below. Qualified investors are in particular regulated financial intermediaries such as banks, securities dealers, fund management companies and asset managers of collective investment schemes and central banks, regulated insurance companies, public entities and retirement benefits institutions with professional treasury or companies with professional treasury.
The contents, however, are not intended for non-qualified investors. By clicking "I agree" below, you confirm and acknowledge that you act in your capacity as qualified investor pursuant to CISA or as an “independent asset manager” who meets the additional requirements set out hereafter. In the event that you are an "independent asset manager" who meets all the requirements set out in Art. 3 para. 2 let. c) CISA in conjunction with Art. 3 CISO, by clicking "I Agree" below you confirm that you will use the content of this website only for those of your clients which are qualified investors pursuant to CISA.
Representative in Switzerland of the foreign funds registered with the Swiss Financial Market Supervisory Authority ("FINMA") for distribution in or from Switzerland to non-qualified investors is ACOLIN Fund Services AG, Affolternstrasse 56, 8050 Zürich, and the paying agent is UBS Switzerland AG, Bahnhofstrasse 45, 8001 Zürich. Please consult www.finma.ch for a list of FINMA registered funds.
Neither information nor any opinion expressed on the website constitutes a solicitation, an offer or a recommendation to buy, sell or dispose of any investment, to engage in any other transaction or to provide any investment advice or service. An investment in a Robeco/RobecoSAM AG product should only be made after reading the related legal documents such as management regulations, articles of association, prospectuses, key investor information documents and annual and semi-annual reports, which can be all be obtained free of charge at this website, at the registered seat of the representative in Switzerland, as well as at the Robeco/RobecoSAM AG offices in each country where Robeco has a presence. In respect of the funds distributed in Switzerland, the place of performance and jurisdiction is the registered office of the representative in Switzerland.
This website is not directed to any person in any jurisdiction where, by reason of that person's nationality, residence or otherwise, the publication or availability of this website is prohibited. Persons in respect of whom such prohibitions apply must not access this website.