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.”
Please read this important information before proceeding further. It contains legal and regulatory notices relevant to the information contained on this website.
The information contained in the Website is NOT FOR RETAIL CLIENTS - The information contained in the Website is solely intended for professional investors, defined as investors which (1) qualify as professional clients within the meaning of the Markets in Financial Instruments Directive (MiFID), (2) have requested to be treated as professional clients within the meaning of the MiFID or (3) are authorized to receive such information under any other applicable laws. The value of the investments may fluctuate. Past performance is no guarantee of future results. Investors may not get back the amount originally invested. Neither Robeco Institutional Asset Management B.V. nor any of its affiliates guarantees the performance or the future returns of any investments. If the currency in which the past performance is displayed differs from the currency of the country in which you reside, then you should be aware that due to exchange rate fluctuations the performance shown may increase or decrease if converted into your local currency.
In the UK, Robeco Institutional Asset Management B.V. (“ROBECO”) only markets its funds to institutional clients and professional investors. Private investors seeking information about ROBECO should visit our corporate website www.robeco.com or contact their financial adviser. ROBECO will not be liable for any damages or losses suffered by private investors accessing these areas.
In the UK, ROBECO Funds has marketing approval for the funds listed on this website, all of which are UCITS funds. ROBECO is authorized by the AFM and subject to limited regulation by the Financial Conduct Authority. Details about the extent of our regulation by the Financial Conduct Authority are available from us on request.
Many of the protections provided by the United Kingdom regulatory framework may not apply to investments in ROBECO Funds, including access to the Financial Services Compensation Scheme and the Financial Ombudsman Service. No representation, warranty or undertaking is given as to the accuracy or completeness of the information on this website.
If you are not an institutional client or professional investor you should therefore not proceed. By proceeding please note that we will be treating you as a professional client for regulatory purposes and you agree to be bound by our terms and conditions.