As Indonesia accelerates its role in the global energy transition, its capital, Jakarta, is sinking by up to 20 centimeters per year. Between $40 billion seawalls and the mirage of a new capital in the jungle, the fate of 42 million people wavers between ecological security and social injustice.
Jakarta lives a paradox: it is a leader in the green economy thanks to its nickel reserves, yet it is the fastest-sinking city in the world. This is due to subsidence - the ground sinking because of excessive groundwater extraction. Northern neighborhoods are being swallowed. Projections show Muara Baru, the hub of the national fishing industry, submerged under nearly five meters of water by 2050.
The government’s response, the Giant Sea Wall, a monumental $40 billion project, threatens the rights of fishermen. Besides limiting access to the sea, historic villages like Muara Angke have been destroyed, and entire fishing communities have been relocated miles away from the water, their only source of livelihood. A “fragmented ecological security” is emerging. Elites retreat into premium ecological enclaves, while kampungs (urban villages) are left in states of extreme vulnerability. This urban fragmentation exacerbates inequality, pitting protected, sustainable zones against overcrowded, neglected neighborhoods.
The water crisis is rooted in the Dutch colonial era, with a water network designed to serve only the colonialists. Today, more than 60 per cent of Jakarta’s residents rely on groundwater, which provides nearly two-thirds of the city’s water consumption. Piped water has never been the primary source. While the wealthy use industrial pumps to tap into deep aquifers, the poor illegally extract increasingly brackish and contaminated surface water, fuelling soil collapse. Government restrictions on groundwater extraction, while aimed at stopping subsidence, turn into a violation of the human right to water in the absence of efficient public alternatives. Access to clean water remains a privilege that solidifies the spatial divide between a protected minority and a majority exposed to imminent disaster.
Jakarta’s subsidence demands flood protection while simultaneously safeguarding displaced communities through models like Kampung Akuarium, inaugurated in 2021. Following the forced evictions of 2016, justified by hydraulic security needs, the community used the Community Action Plan (CAP) to transform from victims of displacement into co-designers of their own resilience. This shows it is possible to integrate poor populations into climate adaptation plans, preserving their dignity and connection to the land through bottom-up decision-making.
The architectural response is the Kampung Susun or “vertical village”, a structure that preserves the traditional social fabric by integrating communal spaces and housing suited for informal economic activities. Unlike grey government dormitories (rusunawa), the revolutionary element is the shift from renting to ownership through credit cooperatives, granting citizens stability and sovereignty over their living spaces. Historic court rulings have also recognized the illegality of evictions that destroy not just homes, but social networks and livelihoods.
However, only a small portion of the displaced community has managed to move into such residential structures. Despite the success of projects like the Kampung Susun Produktif Tumbuh Cakung, the challenge remains scaling this model to the entire affected population, as future sustainability will depend on the strength of the social and economic networks that take root in this new vertical context.
The relocation of the capital to Nusantara is a response to Jakarta’s sinking, but it is perceived by many as a “surrender” that risks abandoning ten million residents to climate vulnerability. Although presented as a sustainable “forest city”, the project raises grave environmental alarms regarding deforestation in Borneo and social concerns over the marginalization of approximately 20,000 Indigenous people, such as the Balik people, often expropriated without transparency or consent.
From an economic and geopolitical perspective, the ambitious $32 billion plan (slated for completion by 2045) struggles to find solid funding sources, pushing Indonesia to seek support from Middle Eastern “petrodollars” and massive Chinese investments. While Beijing sees Nusantara as a strategic node for hegemony in the Indo-Pacific, doubts remain regarding the city’s actual attractiveness. To prevent Nusantara from becoming a “cathedral in the desert” for elites, the government must ensure the social integration of the poor, protect the land rights of local communities, and simultaneously fund the infrastructural resilience of “old” Jakarta.
Indonesia is a vital partner for Beijing due to its vast nickel reserves, which are essential for the Chinese electric vehicle supply chain, and its central role in the Belt and Road Initiative (BRI). Through billions of dollars in investments in infrastructure and industrial hubs, China aims to consolidate its influence in Southeast Asia and secure maritime routes in the Indo-Pacific.
However, Indonesia faces a risky technological dependence on China, which holds 75 percent of the know-how, alongside serious environmental concerns. Consequently, President Prabowo Subianto is pursuing a policy of pragmatic non-alignment: by seeking entry into both BRICS and the OECD, Jakarta aims to diversify its partners, attract Western capital and acquire the technical autonomy necessary for sustainable growth.
Key Takeaways
- Jakarta sinks by 20 cm a year due to unregulated water extraction, a problem primarily affecting the poor who lack access to the water grid.
- Massive seawalls protect the elites but threaten fishermen and historic villages, creating “first-class” and “second-class” urban zones.
- Experiments like Kampung Akuarium show that territory can be defended without evicting residents by involving them in the design process.
- The new capital, Nusantara, costs $32 billion; it risks becoming a paradise for the few that devastates Borneo and ignores those left behind in Jakarta.
- The project depends on Chinese and Middle Eastern funds, turning an ecological necessity into a gamble for Indo-Pacific hegemony.
- Indonesia is diversifying its global relations with the political West and BRICS.
Sources and Further Readings
Achmad Syamsudin, Indonesia's Diplomacy Strategy in BRICS: Bridging National Interest and Global Political Balance, SIT Journal, Vol. 2 No. 2
https://sitjournal.com/sitj/article/view/44
Ahmad Risyad Sumartapraja and Diajeng Wulan Christianti, The Right to Water in Jakarta: Limitation in a Sinking City, Padjadjaran Journal of Law, Vol. 9: No. 1, Article 5
https://journal.unpad.ac.id/pjih/vol9/iss1/5/
Alexander R. Arifianto and Virdika Rizky Utama, How China views its economic relations with Indonesia, The Interpreter, 1 December 2025
https://www.lowyinstitute.org/the-interpreter/how-china-views-its-economic-relations-indonesia
Ayumi Fujii, Will The New Capital Plan Save Indonesia From Sinking or Sink It Into Debt? Grassp, 19 December 2023
https://www.pp.u-tokyo.ac.jp/en/graspp-blog/indonesia-capital-relocation/
BBC News, The World’s Fastest Sinking City, 7 April 2020
https://www.bbc.com/reel/video/p088t8gm/the-world-s-fastest-sinking-city
Dames Alexander Sinaga, What Is Kampung Susun and Why Do Jakarta's Urban Activists Love It? Jakarta Globe, 15 March 2018
https://jakartaglobe.id/news/kampung-susun-jakartas-urban-activists-love#goog_rewarded
Emma Colven, Water Crisis and Splintered Security in Jakarta, LSE, 23 February 2022
https://blogs.lse.ac.uk/seac/2022/02/23/water-crisis-and-splintered-security-in-jakarta/
Felix Patrick, Sea Level Rise: A silent killer, sinking Jakarta and with it, Indonesia’s Fishing Industry, Medium, 11 September 2023
Gerakan Mandiri, Kampung Akuarium: From Rubble to Resistance, The Self-Reliance of a Displaced Urban Community, 9 September 2025
https://gerakanmandiri.com/en/from-rubble-to-resistance/
Irine Hiraswari Gayatri and Dini Suryani, Displaced Indigenous women bear the brunt of Indonesia’s capital city project, East Asia Forum, 21 September 2024
Michelle Kooy and Kathryn Furlong, Why the Rich in Jakarta Have Better Access to Water than the Poor, The Conversation, 19 March 2018
Philip Sherwell, $40bn to Save Jakarta: the Story of The Great Garuda, The Guardian, 22 November 2016 https://www.theguardian.com/cities/2016/nov/22/jakarta-great-garuda-seawall-sinking
Vera Setijawati and Danielle Chevalier, Kampung Susun: Participatory Housing Design in Jakarta, UGovern, 24 April 2025
https://ugovern.eu/kampung-susun-participatory-housing-design-in-jakarta/
SIGA Eye Podcast on indonesia
SIGA Eye Podcast on Indonesia (in German, 04.02.2025)