This was decided by the outgoing president, Joko Widodo, in a decree. But despite the government’s efforts, foreign investors are reluctant to participate in the project. Prabowo himself, his elected successor, despite public statements, does not seem determined to make the development of the city a priority. At the same time, the relocation of the administrative offices, which was due to take place this month, has been postponed.
Jakarta () – The events surrounding the inauguration of Indonesia’s new capital, Nusantara, have not only been rescheduled, but even postponed. And now President Joko Widodo has signed a presidential decree to hand over the management of the city’s real estate to investors, national or foreign, for 190 years.
The Indonesian state will finance only 20% of the total costs of the new capital, with the rest coming from the private sector, Widodo had previously explained. To this end, he travelled to the United Arab Emirates on 15 July to convince new investors to finance the project. But the Indonesian president is also trying to revive the image of Nusantara after the departure of some key figures who were following its development and about whom the government had never clarified anything. At the beginning of June, Bambang Susantono, a former official of the Asian Development Bank who was leading the project, and his deputy, the architect Dhony Rahajoe, left their posts without giving any explanation.
Following Jokowi’s announcement, sarcastic comments immediately began circulating on local social media wondering whether “Ibukota Nusantara” – the city’s name in Indonesian – was “for sale”, with several MPs even claiming that the president’s decision was a “poor marketing strategy”.
“Jokowi’s decision to hand over property management to investors for 190 years will only create problems, as there are not many commercial entities willing to invest in Nusantara,” said Jaya Darmawan, a researcher at the Center for Economic and Law Studies (Celios). “Financial profitability and business risks are certainly key issues for any investor,” she added, “but basic services are still a serious concern.”
The capital, which will cover an area of about 2,000 square kilometers, is expected to be built in East Kalimantan province and replace Jakarta, which is struggling with pollution, devastating floods and overpopulation. The cost was estimated at 460 trillion rupiah, or about $35 billion, but as of January this year less than 48 trillion rupiah had been raised, according to the agency that tracks Nusantara development.
According to the original plans, some administrative offices, including the presidential palace, were supposed to have been moved in July. But by Jokowi’s own admission, water and electricity services are still not available and are unlikely to be available before the end of the month. On July 16, Widodo attributed the delay to heavy rains. “This is normal for large projects,” he added.
Some experts believe that it will take 20 to 30 years for the city to be considered fully functional. Indeed, the chosen site is an area at risk of malaria, is subject to flooding and is inhabited by indigenous populations. Several public officials have also commented on their reluctance to move 1,200 kilometres from Jakarta.
The inauguration of the new capital, albeit on a smaller scale, is still scheduled for Indonesia’s Independence Day on August 17. Some commentators believe that it will ultimately be a largely symbolic event. Last month, it was announced that Widodo and President-elect Prabowo Subianto – who will take office in October – will preside over the events in Nusantara, while Vice President Ma’ruf Amin and Vice President-elect Gibran Rakabuming Raka (Widodo’s son) will lead the transition ceremony in Jakarta.
Prabowo himself, while declaring he wants to continue with the project, has not yet discussed the move to Nusantara with his team, and according to sources familiar with the matter, construction of the capital is likely to proceed at a much slower pace, because the city, at least for now, is not one of the president-elect’s priorities.
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