The capital of the Republic of Indonesia, Jakarta is strategically positioned near the commercial epicenter of Southeast Asia – the Strait of Malacca – the shortest shipping channel between the Indian and Pacific Oceans. Nearly one third of all of the world’s traded goods flow through this passage, connecting the major economies of Asia to the Middle East and Europe. Jakarta’s participation in ASEAN, as well as its economic and strategic cooperation with the Australians and Americans, perfectly positions it for future growth.
Thanks to its economic success, Jakarta is a city of contradictions: where multimillion-dollar skyscrapers fill the background as overpopulated slums saturate the foreground. Originally constructed by the Dutch to accommodate less than 1 million people, Jakarta now is the largest city in Southeast Asia, with an estimated population of 10.2 million. The surrounding metropolitan area, Jabodetabek, contains more than 28 million people, while the island of Java is home to 140 million.
As Jakarta continues to grow economically, its population will expand accordingly, attracting migrants from Indonesia’s outlying islands and beyond. This will intensify its current challenges with overpopulation while keeping labor costs low enough to attract an increasingly wide array of foreign investment.
For more information on Indonesia and the bright future of Southeast Asia, see Chapter 9 of The Accidental Superpower.