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Indonesia
This Week in AsiaOpinion
Joseph Sipalan
Joseph Sipalan

As I see it | Indonesia’s Nusantara project could help lay foundation for Asean’s economic potential

  • As President Joko Widodo hits a funding speedbump, he should look to Asean neighbours to help construct new capital city Nusantara
  • Such an agreement would show that the region is maturing, and coming closer to realising its potential as the world’s new growth centre

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Indonesia’s President Joko Widodo attends an Asean Summit via video conference on June 26, 2020. Photo: AFP/File
Joseph Sipalan
Indonesia’s President Joko Widodo received some welcome news earlier this week when a clutch of Malaysian companies registered their interest to invest in his country’s ambitious project to build a new capital city.
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The move came as Malaysian Prime Minister Anwar Ibrahim on Monday travelled to Jakarta in his first overseas trip, during which a plethora of commitments and agreements were made. The deals will see Malaysian and Indonesian firms join hands on manufacturing, renewable energy, pharmaceutical and property-development projects, with a total potential value of 1.66 billion ringgit (US$380 million).

Should the projects get off the ground, the total contribution would be a fraction of Indonesia’s bill to build Nusantara city in Kalimantan, which has been estimated to be as much as US$40 billion.

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Indonesia celebrates its 77th anniversary of independence at site of future capital Nusantara

Indonesia celebrates its 77th anniversary of independence at site of future capital Nusantara
Nevertheless, it will get the ball rolling for Widodo’s vision to move the country’s political centre, as current capital Jakarta faces the threat of sinking due to a combination of overexpansion and climate change.

Jokowi, as he is popularly known, announced the plan to build Nusantara in 2019 after being re-elected for his second and final presidential term.

Development is under way, with the government bearing 20 per cent of the cost. The plan is to move about 1.9 million people to the new capital by 2045, with some civil servants possibly shifting to Nusantara as early as next year.

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The great hurdle for Jokowi is securing investors to cover the remaining 80 per cent of development costs.

Illustration of Indonesia’s future presidential palace in East Kalimantan, as part of the country’s relocation of its capital Jakarta to Borneo island that will be named “Nusantara”. Photo: AFP/Handout
Illustration of Indonesia’s future presidential palace in East Kalimantan, as part of the country’s relocation of its capital Jakarta to Borneo island that will be named “Nusantara”. Photo: AFP/Handout
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