You might think Jakarta, the capital city, political and business center of Indonesia is its most expensive city. If not Jakarta then probably Bali/Denpasar with its throngs of tourists and the hard currency they bring. You'd be wrong on both counts. According to a recent survey, Indonesia's most expensive city is Balikpapan, in the province of East Kalimantan.
How could a smallish Indonesian city, which until recent times was nothing more than a quiet fishing village, now be considered the costliest place in the whole archipelago? One word: Oil. Balikpapan is the closest city to the abundant offshore reserves located in the Strait of Makassar separating Borneo and Sulawesi, and as such plays host to both local and multinational petroleum companies, many oil services companies and other businesses related to the industry. The names may be familiar to you: Chevron and Total are based in Balikpapan, as are Halliburton and Schlumberger. In addition, the city is the home of Indonesia's own petroleum giant, Pertamina, which has its processing plants and refineries in the city. Two other industries traditionally associated with the area are mining and timber. With all these lucrative industries come wealth, opportunity and expansion. In short, Balikpapan is no longer the fishing village of yesteryear, but a booming, prosperous town.
Residents and environment
In contrast to many regional Indonesian cities, Balikpapan is not dominated by any particular ethnic group. In its fishing days, it was inhabited mainly by the Bugis, originally of southern Sulawesi, but recently people from all over the country have moved there seeking the prosperity offered by the city. There has been a fair amount of transmigration from Java, but you'll also find Bataks, Makassarese, Manadonese and Balinese there. The presence of many foreign companies means that there is a large number of expatriates in the city. Some are transient, but others have fallen for the city's charms (including its ladies) and are there for the long haul. Balikpapan still moves at a quiet pace, too slow for some, but has a frontier feeling about it; this is a place, in contrast to most of Indonesia, where real money can be made.
The wealth provided by oil revenues, together with decent city management, has benefited the city's environment too. Atypical for an Indonesian city, Balikpapan is clean, quite orderly and does not have a traffic problem. If you can turn a blind eye to the rather unsightly oil refineries on its western seaboard, it's a scenic little place too. It's green, hilly and stands right upon the ocean. It's worth taking a drive or a walk (it's a pleasant city for walking) through the undulating and well-maintained Pertamina housing complex for its lovely sea views. There are some small beaches in the city itself (including Dapur Bunda, which has lovely sunsets), although better stretches of sand can be found just out of town.
Contributor: Nick Aarons