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New Capital Nusantara: Jokowi’s Pursuit of Indonesia-Centric Development

Jayanty Nada Shofa
October 17, 2024 | 7:08 pm
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President Joko
President Joko "Jokowi" Widodo and his successor Prabowo Subianto check on the progress of the new capital project Nusantara on Aug. 12, 2024. (Photo Courtesy of Presidential Press Bureau)

Jakarta. Indonesia’s $33 billion capital relocation project is set to become the legacy of the outgoing President Joko “Jokowi” Widodo’s 10-year presidency.

Jokowi is currently trying to build a new capital -- which he names Nusantara -- from scratch. The city’s hotels and other infrastructure are also starting to take shape. It is also a work in progress for the apartment towers that will house Indonesia’s civil servants, although it will be up to Jokowi’s successor to decide on when they will officially move to the new capital.

Indonesia’s most developed yet severely congested Jakarta remains the country’s capital as of today. Jakarta, which is located in the northwest coast of Java, will lose its capital status once the president inks the Nusantara decree. Jokowi is planning to pass the task of signing the document to his successor Prabowo Subianto, saying that the perfect time for the signature is when "everything is ready". To Jokowi, the purpose of constructing a new capital in East Kalimantan is to move the current economic activities away from being heavily concentrated in Java.

“I’m pretty sure the [new capital Nusantara] can drive economic growth for East Kalimantan, specifically Balikpapan and the regency of North Penajam Paser,” Jokowi told his ministers in a historic cabinet meeting that took place in Nusantara back in August.

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“The reason behind this capital relocation is because we want equitable economic development. The Java island makes up 58 percent of our national gross domestic product [GDP], and that is why we want regions outside Java to also see economic activities,” Jokowi said.

New Capital Nusantara: Jokowi’s Pursuit of Indonesia-Centric Development
The construction of the civil servants' apartments at the new capital Nusantara on Sep. 13, 2024. (Antara Photo/M Risyal Hidayat)

Local micro, small and medium enterprises (MSMEs) started to reap the benefits of the megaproject. The government decided to open Nusantara for tourist visits in September. The Nusantara rest area, which lies in North Penajam Paser, has seen many curious tourists who want to take a look around Indonesia's future capital. 

The government had invited local MSMEs to join a training session before they could set up their shops at the rest area. Small business owner Mita Rahmi was among those who got invited. Mita admitted that her income had soared ever since she began opening her shop at the new capital. What she earned could even double on weekends.

“Praise be to God. There are lots of visitors here. My income also continues to increase everyday,” Mita said, not long ago.

The government mainly relies on the private sector to fund the megaproject. They only plan on covering 20 percent of the costs with the state money. This sparks questions on whether the project is attractive to investors from home and abroad. 

Jokowi recently dispelled doubts over lack of foreign investors’ interests in the new capital. Just a few weeks ago, the ex-Jakarta governor launched the construction of foreign-owned projects.

China’s Delonix Group has begun building its Rp 500 billion (approximately $32.3 million) mixed-use project that combines office and apartment towers. Russia's Magnum Estate Internasional is also investing up to Rp 500 billion to build a mix-use project called the Magnum Resort.

New Capital Nusantara: Jokowi’s Pursuit of Indonesia-Centric Development
President Joko 'Jokowi' Widodo launches the construction of Magnum Resort project at the new capital Nusantara on Sep. 25, 2024. (Photo Courtesy of Presidential Press Bureau)

Prabowo is about to rise to power this weekend. The former army general has promised continuity of Jokowi’s policies, and the capital relocation is no exception. Prabowo even claimed that he had also invested in Nusantara as a businessman, although he did not go into details on which sector he put his money in.

“We are aware that a capital development is not something that we can finish in a short amount of time. It is an exhaustive work that takes a long time to finish. But I’m pretty sure that Nusantara can function [like an actual city] within 3-5 years from now,” Prabowo told reporters a few months ago.

B-Universe journalist Fuad Iqbal Abdullah also contributed to the story.

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