Indonesia Moves Capital to New $35 Billion City in Jungle

Indonesia is poised to officially relocate its capital from Jakarta to Nusantara, a city which is currently under construction.

Nusantara is slated to hold it’s first ever Indonesian Independence Day on August 17.

The Context

The decision to move the capital from Jakarta, which has served as Indonesia’s political and economic hub since independence in 1945, stems from the city’s severe environmental and infrastructural challenges.

Jakarta, a city of over 30 million people, faces chronic flooding, traffic congestion, and rapid land subsidence, with about 40 percent of the city now lying below sea level due to excessive groundwater extraction and rising sea levels​.

What We Know

President Joko Widodo, commonly known as Jokowi, announced the relocation plan in 2019, citing the need to ease Jakarta’s burden and promote more balanced development across the archipelago.

“We want to build a new Indonesia…a new work ethic, new mind-set, new green economy,” Jokowi told the New York Times last year.

Indonesia’s President-elect Prabowo Subiato has said that he is committed to “continue, and if possible finish,” the new capital, according to Bloomberg, after uncertainty as to whether the incoming president would want to continue pursuing the project.

Nusantara, which means “archipelago” in Javanese, was selected for its strategic location in East Kalimantan on the island of Borneo, roughly 1,200 kilometers from Jakarta.

The $35 billion project aims to not only alleviate Jakarta’s overpopulation and environmental stress but also to create a symbol of Indonesia’s aspirations for modernity and technological advancement​.

According to The Guardian, Jokowi has said Nusantara would be about 15 percent complete by Independence Day on the August 17. It is expected that this day will see the official transfer of the capital city.

Incumbent President Jokowi and President-elect Subiato are inspecting the capital ahead of the Independence Day celebrations, as per Bloomberg.

Jokowi also led his first-ever full capital meeting in the new capital on Monday, according to Bloomberg. He brought many top-ranking Indonesian government officials to the new city.

Back in July, Jokowi invited local celebrities to Nusantara, and for the first time he used the office and slept at the new presidential palace, as per Bloomberg. Over the Independence Day celebrations, he will stay there for three days.

The Guardian reported that many of the buildings in the new city are unfinished. Delays in construction has impacted plans to have 12,000 civil servants located to Nusantara from July.

The government administration has relied on private investment to build the city, with the state covering 20 per cent of the cost, as per The Guardian. The paper reported that the lack of investment has put President-elect Prabowo in a difficult position once he is sworn in.

What’s Next

The upcoming Independence Day celebrations in Nusantara will mark a key moment in Indonesia’s history.

Nusantara will be the nation’s capital when the president issues a decree, transferring this status from Jakarta. It could be that the decree will be signed by President-elect Subianto, whose inauguration will take place on October 20.

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