The Indonesian government has announced what appears to be a drastic measure: to move the administrative centre of this country of 240 million from crazy, overcrowded Jakarta – where it has been located since the 17th century – to a new settlement 1800 kilometres away in Borneo.

The President cited a number of reasons for this: "First, it has fewer earthquakes, floods and forest fires. Second, it is strategically located as it lies right in the centre of the country. Third, it is located near developed cities including Balikpapan and Samarinda. Fourth, it has sufficient infrastructure and fifth, some 180,000 hectares of government land is available."

He also said that Jakarta and Java, the island on which it sits, have a disproportionate amount of the country's population and economic activity, and he wanted to "minimise the gap between Java and places outside Java".

President Joko Widodo did not mention another key, but slightly embarrassing, truth: Jakarta is sinking.

The northern part of the city is disappearing into Jakarta Bay. Flooding is endemic in the rainy season because 13 rivers run through the city and are unable to drain uphill into the bay. Sea walls have been constructed to try to prevent inundation but they too are subsiding into the mud. About 40 per cent of Jakarta now lies below sea level.

Why is Jakarta sinking?

The biggest problem is water. Unlike Australia, Indonesia does not have a series of dams and pipes to deliver water to all the 10 million-plus residents of its biggest city. About 40 per cent of residents rely on bore water, according to the city's tap water company, PAM Jaya, and it is brought up from under their feet by massive pumps running day and night.

It's not just private users either: more than 4000 commercial buildings, such as hotels and offices, also rely on groundwater. The amount of water a company or individual can remove is supposed to be regulated but, as with most regulations in Indonesia, the rules are poor and enforcement minimal. As the water is pumped out, the ground on which the city is built gradually subsides, like a balloon deflating.

As the septic tanks age and rust, they deposit their contents into the same soil from which water is drawn.

(There is also no sewerage system, so most people use septic tanks. As they age and rust, tanks deposit their contents into the same soil from which water is drawn – one of the reasons it's wise not to drink Jakarta bore water.)

North Jakarta, which hosts the massive Tanjung Priok port, waterfront apartment developments and 1.7 million people, is particularly under pressure. University of Indonesia geophysicist Syamsu Rosid told the Jakarta Post recently that land subsidence had been aggravated by a lack of green spaces. Concrete and asphalt prevents the absorption of water into the soil, and the sediment that makes up the city's soil is prone to erosion.

How fast is the city going down?

Faster than any other major city in the world. Parts of North Jakarta are sinking up to 25 centimetres per year – or 2½ metres in the past decade. Swathes of it are already underwater, factories and mosques abandoned. Heri Andreas of the Bandung Institute of Technology told the Jakarta Post that, in the next decade, more than a quarter of the city's 662 square kilometres would be submerged.

Across other parts of the city, the average sinking rate is between one and 15 centimetres per year. Together with climate change's rising sea levels, it means that almost half the city now sits below sea level.

What are the consequences?

Jakarta is the commercial as well as the administrative capital of Indonesia. About 10 million people live within the city bounds, but more than 30 million live in Greater Jakarta. Subsidence affects the poor, mainly, as people have moved by their millions from the country's islands in search of work.

They often live in informal settlements (known as kampungs) on unclaimed land on the banks of rivers and canals, or in houses built on stilts over the water. They live, fish, cook, eat and wash over the waterways then discard rubbish and defecate into the water. As the city is inundated, many of these people are likely to be displaced.

But everyone, even the wealthy, are affected. Commercial buildings, high-rise apartments and government offices are also subject to subsidence, cracking and persistent flooding. A few years ago a driver was killed when he was trapped by floodwater in the underground carpark of a city commercial building. Even the presidential palace is not immune. It flooded in January 2013, prompting a barefoot examination of the damage by then president Susilo Bambang Yudhoyono and foreign minister Marty Natalegawa.

Can anything be done about it?

To halt the sinking, the city needs to stop extracting bore water, which means the city government needs to build a system of water pipes, dams and river diversions. This would mean cleaning the filthy waterways upstream, policing the factories that dump chemicals into them, and installing a sewer system in a mega-city that has never had one. All this in a country renowned for the corruption and gouging on any major project.

Then they would need find land to resettle millions of the country's poorest people, who are likely to be unwilling.

Why was Jakarta built on a swamp in the first place?

In the early 1500s, it was all about trade. This muddy land had a natural port that was first established by the Hindu kingdom of Sunda. Sultans took it over in 1527 and named it Jayakarta, Javanese for "victorious city".

Having successfully tamed low-lying Holland, the Dutch believed they could also tame tropical Jakarta.

A century later, the Dutch arrived looking for a base from which to send the spoils of colonialism (mainly valuable spices) back to Europe. Having successfully tamed low-lying Holland, they believed they could also tame tropical Jakarta, adding canals, streets and civic squares that, even today, feel something like a grimy Amsterdam.

Where is the capital's proposed new location?

Joko did not name the place, but he described a piece of government-owned land called Bukit Suharto – or Suharto's Hill. It's a designated protection area on the island of Borneo (known in Indonesia as Kalimantan) which has at times been a production timber forest but is currently set aside for conservation.

The area has dense forest, small-scale coal mines and a smattering of palm oil plants, according to Channel News Asia. Illegal deforestation and frequent forest burning have further degraded the quality of the land, but it's not far from a sanctuary for rescued orangutans and sun bears.

How do you move a capital, and what are the pitfalls?

More than 30 countries or regional states have relocated their seats of power to new cities designed from scratch. A number of cities, but mostly New York, hosted the United States Congress until it landed in Washington DC in 1800. In 1911, King George V decreed that the capital of British India would move from eastern Calcutta to central Delhi, although the new city wasn't inaugurated until 1931. Pakistan switched from Karachi to Islamabad, which was perceived as less vulnerable to attacks, in 1967. Brazil shifted its capital from Rio de Janeiro in 1960 to Brasilia, which is now a UNESCO World Heritage site for its modernist architecture and urban planning but, by most accounts, a very boring place to live.

The moves are not over yet either. Egypt announced in 2015 that it would move its administrative centre a few kilometres east of Cairo, to ease congestion, and began inaugurating various key buildings this year, including a cathedral and a mosque.

Making the move usually involves passing a law to designate a new capital then actually building it, and shifting the country's parliament or congress. It helps if the head of state and top executive also live there. Australia did this in 1927 when the prime minister and the parliamentary sittings moved to Canberra from Melbourne after the first parliament house was built.

One of the most notorious capital-move failures is Naypyidaw … a safari park, a zoo, golf courses – but very few people.

However, to make a success of a new, planned capital, government departments, at least one university, religious institutions, support businesses, housing and a large enough number of people and facilities to make a city also need to establish themselves.

This did not happen in Canberra until the 1950s when Robert Menzies championed its growth, including a hefty provision of government housing.

One of the most notorious capital-move failures is Naypyidaw, the purpose-built capital of Myanmar (formerly Burma), which allegedly houses a million people. Many doubt this but, even if it's true, at five times the size of London (population nine million) it's sparsely populated at best. The empty, 20-lane freeways are rumoured to have been built to land aircraft on them in case of anti-government protests. There is a safari park, a zoo, multiple golf courses, electricity, Wi-Fi – but there are very few people.

"This city is mainly for government staff, government buildings," one man told the South China Morning Post. "It's not very interesting here. Most people are not that happy; they are just living here because they can earn money, because they can work here."

How much will it cost to move the capital?

Joko insists the cost will be $46 billion, about 19 per cent of it from the national budget, after selling land and buildings in Jakarta. The rest would come from a public-private partnership and direct business investments.

Does everyone like the idea?

No. Local environmental NGO leader Hafidz Prasetyo told Channel News Asia that, “as a conservation area, [Bukit Suharto] should be a home for sun bears, local birds and other kinds of animals as well as teak woods, bengkirai woods and those should be preserved.

“The development of hotels and shopping centres will need extensive land clearing. We actually reject the plan.”