THE IMPACTS OF THE RELOCATION OF THE NATIONAL CAPITAL ON JAKARTA'S ECONOMIC DEVELOPMENT TOWARDS A GLOBAL CITY

• Main Author: Marwa Huwaida, Fidela
• Format: Final Project
• Language: Indonesia
• Subjects: Perencanaan wilayah
• Online Access: https://digilib.itb.ac.id/gdl/view/82784
• Institution: Institut Teknologi Bandung

The relocation of the National Capital City (IKN) from Jakarta to Kutai Kartanegera Regency and Penajam Paser Utara Regency, East Kalimantan has an impact on the transformation of the development of the Jabodetabekpunjur Metropolitan Area, especially in the economic aspect. As the center of the national economy, Jabodetabekpunjur plays an important role in the business landscape of the national economy by contributing 28% of Indonesia's total Gross Domestic Product (GDP). However, with the relocation of IKN, Jakarta faces new challenges for Jakarta to realize its vision as a Global City. From a macro perspective, Indonesia's largest metropolitan area is one of the strategic nodes in the global economy. The shift in Jakarta's role is predicted not to eliminate Jakarta's specificity considering that it is projected that until the future Jakarta's economic contribution to the national economy is still very large, which is the key to national economic growth. This study aims to evaluate the readiness of Jakarta as a Global City after the relocation of IKN and to develop strategic initiatives for the development of the Jabodetabekpunjur metropolitan area that consider the economic impact of the loss of Jakarta's status as the capital city. The method used in this research includes impact projection analysis using descriptive statistics based on detailed data from relevant agencies supported by content analysis. Now that Jakarta no longer holds the status as the nation's capital, the vision of Jakarta's future development as a Global City that is also the center of Indonesia's national economy and business landscape requires a more detailed downward strategy as Jakarta will soon enter a transition period. The study findings show that Jakarta still faces challenges in meeting the Global City indicators, with only 40% of the 30 Global Power City Index indicators met. In addition, the relocation of IKN is projected to have an impact on the decline of Jakarta's GRDP, especially in terms of state budget and tax allocations, as well as the migration of civil servants, business people, and construction workers. In addition, the study findings reveal that the relocation of IKN will reduce Jakarta's Gross Regional Domestic Growth (GRDP) with a significant decline in government-related sectors, such as the government administration and business services sectors. In addition, population migration will lead to changes in Jakarta's economic structure, with a potentially significant decline in GRDP in the first few years post-displacement. However, the study also points out the possible positive impacts of relocating the IKN, such as a reduction in pressure on Jakarta'svi infrastructure and congestion as well as budget savings required for affordable housing. Ultimately, Jakarta will still play an important role in the national economy. However, strong efforts are needed to maintain and improve its competitiveness in facing the complex challenges after the relocation of the national capital. To support Jakarta's development as a global city, reforms in the metropolitan institutional system are needed to ensure effectiveness in solving the challenges faced by the metropolitan area, including giving greater autonomy to coordinating institutions such as the Agglomeration Area Council. This research provides recommendations for holistic regional development strategies, such as investment in integrated and sustainable infrastructure and improved regulation to maintain economic stability and sustainable growth. Thus, this research contributes to understanding the complexity of the impact of IKN relocation on Jakarta's economy, which can be the basis for effective policy formulation. It also provides new insights into the dynamics of regional economic development in the context of structural transformation.