Jakarta. Indonesia's future capital, Nusantara, began development in East Kalimantan in 2022. A year later, the province’s economic growth surged to 6.22 percent from 4.48 percent in 2022, surpassing the national average of 5.05 percent. By the first quarter of 2024, it reached 7.26 percent, the highest level since 2013.

According to Budi Widihartanto, a representative from Bank Indonesia’s East Kalimantan office, this growth is fueled by strong demand in sectors like mining and construction, further boosted by ongoing capital development. He said that infrastructure projects, such as a new airport and economic hubs around Nusantara, are driving both central and local government spending.

Budi also pointed out that the community's economic activities are benefiting, particularly through the rise of micro, small, and medium enterprises (MSMEs). In 2023, East Kalimantan's trade sector grew by 6.85 percent, marking the highest growth since the COVID-19 pandemic.

Yusniar Juliana, head of the Central Statistics Agency (BPS) in East Kalimantan, emphasized that the region’s growth is propelled by government administration, defense, and social security sectors, which grew by 17.44 percent. East Kalimantan now contributes 48.12 percent to Kalimantan’s overall regional growth.

Nusantara's development has also positively impacted tourism, with hotel occupancy rates in the province reaching 67 percent in August 2024, second only to Bali.

President Joko "Jokowi" Widodo previously noted that the relocation project has already begun to influence surrounding regions. The $33 billion plan to move Indonesia’s capital from Jakarta to Nusantara is set to be a key legacy of Jokowi’s 10-year presidency. He has overseen the initial stages of the capital’s construction, including infrastructure and housing for civil servants.

While Jakarta remains the capital, its status will shift once the Nusantara decree is signed, a task Jokowi plans to pass to his successor, Prabowo Subianto. Jokowi believes relocating the capital from Java to East Kalimantan will decentralize economic activity and stimulate regional growth.

“I’m confident the new capital will drive growth in East Kalimantan, particularly in Balikpapan and North Penajam Paser,” Jokowi said during a cabinet meeting in Nusantara in August.

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