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Sustainability Prediction Model for Capital City Relocation in Indonesia Based on Inclusive Wealth and System Dynamics

Author

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  • Takuya Shimamura

    (Department of Urban and Environmental Engineering, Graduate School of Engineering, Kyushu University, 744 Motooka, Nishi-ku, Fukuoka 819-0395, Japan)

  • Takeshi Mizunoya

    (Faculty of Life and Environmental Sciences, University of Tsukuba, Tennodai, Tsukuba, Ibaraki 305-8572, Japan)

Abstract

Based on inclusive wealth (IW), this paper evaluates the impact and sustainability of the Indonesian government’s decision to relocate the capital city from Jakarta to East Kalimantan in terms of economic, human, and environmental aspects. This paper develops an integrated prediction simulation model based on IW and system dynamics and sets three scenarios, depending on the expected population recovery in Jakarta and the increased immigration into the new capital city (NCC) from the nearby areas after the public sector relocates. The most reliable scenario projects benefit of USD 169 billion in IW in 2050, equivalent to 2.41% of the expected cumulative real gross domestic product (GDP) growth in Indonesia from 2021 to 2050. Regarding the sustainability of the relocation, the current investment plans are not sustainable, largely because of the negative impact on human capital, comprising the education and health capital caused by the income gap between Jakarta and the NCC, and due to depreciation of produced capital. This study makes a significant contribution to the integrated evaluation of capital city relocations for Indonesia and beyond, because no previous study of such relocations combines produced, human, and natural capital. This is the first policy evaluation to include the impact of migration on IW, which plays an important role in IW literature, because population is a key model factor.

Suggested Citation

  • Takuya Shimamura & Takeshi Mizunoya, 2020. "Sustainability Prediction Model for Capital City Relocation in Indonesia Based on Inclusive Wealth and System Dynamics," Sustainability, MDPI, vol. 12(10), pages 1-25, May.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:10:p:4336-:d:362838
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    Cited by:

    1. Jiaoning Zhang & Xiaoyu Ma & Jiamin Liu, 2022. "How Can the Digital Economy and Human Capital Improve City Sustainability," Sustainability, MDPI, vol. 14(23), pages 1-18, November.
    2. Jin-hong Im & Seongman Jang, 2022. "Self-Sufficiency of New Administrative Capitals (NACs) Based on Types and Commuting Characteristics of Citizens: Case Study of Sejong," Sustainability, MDPI, vol. 14(20), pages 1-16, October.

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