Indonesia puts relocation of capital city on hold to tackle pandemic hinh anh 1Traffic jam occurs frequently on major routes in Jakarta  (Photo: VNA)

Jakarta (VNA)
- Indonesia has put on a 33 billion USD project, initiated by President Joko Widodo, to relocate the capital city to the island of Borneo as it grapples to rein in the COVID-19pandemic.

Indonesian planning minister Suharso Monoarfa said the government is putting as its number one priority the recovery of the economy and overcoming the pandemic.

Making a frank admission of the obstacles to the project, he said groundbreaking could be delayed until 2022 or 2023, as the government focuses efforts on finding, and then distributing a COVID-19 vaccine to the population of nearly 270 million.

Construction of a state palace and other buildings was initially set to start by 2021, along with upgrades of airports, sea ports and the building of access roads in the forested area earmarked for transformation into a new smart city. Civil servants were due to start moving by 2024.

SoftBank’s chief executive Masayoshi Son, former British Prime Minister Tony Blair and Abu Dhabi Crown Prince Sheikh Mohammed Bin Zayed al Nahyan have been enlisted as advisers for the project.

Normally, such a big project should bring considerable positive ripple effects for the economy, but disbursing the government’s coronavirus stimulus response appeared more urgent now, said Wellian Wiranto, an economist at OCBC Bank.

At present, Indonesia could not afford to move its capital, as the pandemic’s strain on the national budget leads to a ballooning fiscal deficit, another economist said.

The downturn could last longer than the government anticipates, running until the second half of 2021, said Enny Sri Hartati of the Institute for Development of Economics and Finance./.