Indonesian President convenes Inaugural cabinet meeting in new capital

• The project, launched in 2019, aims to secure his legacy before his second and final term ends in October.
• The government expects to cover only 20% of the planned $33 billion budget.
• Construction of Nusantara began in mid-2022, with buildings still unfinished.

On Monday, Indonesian President Joko Widodo held his first Cabinet meeting in the country’s new capital, Nusantara, marking the latest progress in the ambitious $33 billion megaproject just a few months before his presidency ends.

Widodo officially launched the capital relocation project in 2019, aiming to secure his legacy before the end of his second and final term in October.

Since late July, the outgoing leader has been working from the new city in East Kalimantan province on Borneo Island. The city will host its first Indonesian Independence Day celebration in less than a week.

“The Nusantara capital is a canvas that carves the future. Not all countries have the opportunity and the ability to build their capital city starting from zero,” Widodo told his ministers during a livestreamed meeting held in the massive, eagle-shaped new state palace.

“Nusantara is developed with a forest city concept, a city filled with greenery. It is not a concrete city or city of glass. It is also a smart city, supported by technology across all the city’s activities, and a livable city.”

Located more than 1,200 km from the current capital, Jakarta, the move to Nusantara aims to alleviate the strain on the old center of government. Jakarta struggles with chronic traffic congestion, overpopulation, heavy pollution, and is one of the world’s fastest-sinking cities.

The move also aims to redistribute wealth across Indonesia, as Java—home to Jakarta—holds about 56 percent of the country’s population and nearly 60 percent of its economic activity. The relocation process is set to finish by 2045.

Widodo reported that investors have committed approximately IDR 56.2 trillion ($3.53 billion) to various projects, including those in transportation, housing, and education. Last month, he secured a deal to involve Dubai’s financial hub in developing Nusantara’s financial center.

The government expects to cover only 20 percent of the planned $33 billion budget and relies heavily on private sector investment to build key infrastructure and public facilities. Earlier this month, the government launched new capital incentives to attract investment, including granting land rights of up to 190 years.

Construction of Nusantara began only in mid-2022, so buildings in the new city are still unfinished. The new state palace is about 88 percent complete, and several ministry buildings are usable only on their lower levels.

The project, which involves clearing land from Borneo’s jungle, has faced criticism from environmentalists and indigenous communities. They have previously warned that the development of the new capital proceeded without adequate consultation.

Speaking to the press alongside Widodo, Indonesia’s President-Elect and Defense Minister Prabowo Subianto vowed to continue developing the new capital after he takes office on Oct. 20.

“Construction is ongoing and it should continue, and we should even speed it up, if possible,” Subianto said.

“We will definitely finish it, although the outline plan is dozens of years long, like other capital cities also took a very long time. We should not force it, but I am optimistic that in five years, I think, it will function very well.”

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