Indonesia's New Capital Nusantara Faces Challenges Amid Independence Celebrations
By Willy Kurniawan
Investors and financial market enthusiasts around the world are closely watching the development of Indonesia's new capital, Nusantara, as the country celebrated its independence anniversary at the construction site. Despite being a legacy project of outgoing President Joko Widodo, Nusantara has faced setbacks such as construction delays, funding shortages, and leadership resignations.
In a scaled-back ceremony, attended by only 1,300 guests due to logistical constraints, attendees from local communities and construction workers gathered under the red umbrellas of the still-under-construction city. One construction worker, Mulyana, shared his experience of building a ministry office building amidst limited infrastructure and resources.
Located on the eastern side of Borneo island, Nusantara is about 1,200 km away from the current capital, Jakarta. President Jokowi has been trying to instill confidence in the $32 billion mega-project by initiating construction of hotels and office buildings and hosting official meetings at the new state palace shaped like an eagle.
However, plans to relocate thousands of civil servants to Nusantara may be postponed based on the city's readiness, despite earlier directives to move by September. Incoming President Prabowo Subianto has pledged to continue the development of Nusantara.
While a parallel celebration took place in Jakarta, highlighting traditional music and dances, the focus remains on the challenges and progress of Indonesia's ambitious new capital.
Analysis: The development of Indonesia's new capital, Nusantara, is a significant project with potential implications for investors and the country's economy. The delays and setbacks faced by the project could impact the timeline and cost of the mega-project, affecting government spending and infrastructure development. Investors should closely monitor the progress of Nusantara and consider the potential risks and opportunities associated with this ambitious endeavor.