The capital and most populous city of Indonesia is Jakarta, which is formally referred to as the Special Capital Region of Jakarta. Jakarta, which is located on the northwest coast of Java, the world's most populated island, is the most populous city in Southeast Asia and serves as the diplomatic capital of ASEAN. The city serves as the focal point for the nation's politics, as well as its culture and business. It has the status of a province and, as of the year 2020, it will have a population of 10,562,088 people. Although Jakarta has the smallest area of any Indonesian province, its metropolitan area covers 9,957.08 square kilometres (3,844.45 sq mi), which includes the satellite cities Bogor, Depok, Tangerang, South Tangerang, and Bekasi, and has an estimated population of 35 million as of 2021, making it the largest urban area in Indonesia and the second-largest in the world. Although Jakarta only covers 664.01 square kilometres (256.38 sq mi), its metropolitan area covers 9,95 (after Tokyo). The Human Development Index places Jakarta at the top of the list for all of Indonesia's provinces. Migration from all across the Indonesian archipelago has made Jakarta into a cultural melting pot due to the various economic possibilities and the city's capacity to provide a potentially better quality of life than is accessible in other regions of the nation.
One of the cities in Southeast Asia that has been continually inhabited for the longest amount of time is Jakarta. The city, originally known as Sunda Kelapa when it was founded in the fourth century, developed into an important commercial port for the Sunda Kingdom. During the period when it was known as Batavia, it served as the de facto capital of the Dutch colony in what is now the East Indies. Up until the year 1960, Jakarta's formal position was that of a city located inside West Java. After that year, however, it was elevated to the status of a province with a separate capital district. Its administration, in its capacity as a province, is made up of one administrative regency and five administrative cities. Financial institutions such as the Bank of Indonesia and the Indonesia Stock Exchange, as well as the corporate headquarters of numerous Indonesian companies and multinational corporations, are located in the city of Jakarta, which is known as an alpha world city. Jakarta also serves as the seat of the ASEAN secretariat. In 2017, it was projected that the city's GRP PPP was 483.4 billion US dollars.
The most significant problems facing Jakarta include the city's fast urban development, the disintegration of natural systems, traffic jams, congestion, and floods. The city of Jakarta is sinking at a rate of up to 17 centimetres (6.7 inches) each year, which, when combined with the ongoing rise in sea levels, has left the city increasingly susceptible to floods. It is now one of the world's capitals that is falling at the quickest rate. As a result of these difficulties, President Joko Widodo of Indonesia made the announcement in August 2019 that the nation's capital will be relocated from Jakarta to the planned city of Nusantara, which would be located in the province of East Kalimantan on the island of Borneo.