Indonesian President in damage control regarding new capital

JAKARTA, Indonesia (Reuters) – Indonesia’s President is rushing in to reassure bureaucrats and investors about the $32 billion capital city he plans to build on a malaria-prone part of Borneo after two officials who were overseeing the project resigned. This has raised new doubts over the future of the plan.

Analysts say that President Joko’s announcement to start work next month in Nusantara – a massive construction site located 1,200km away from Jakarta – is unlikely alleviate concerns about his legacy project.

“I think investor confidence has declined. “They were already in doubt, and in a ‘wait-and see’ mode. Partly because the land status was unclear, partly because there was a lack transparency in the governance of the capital,” said Yanuar Nugroho.

He said that the resignations made the situation worse. Instead of explaining the truth, the government was trying to cover up the incident.

The president of Indonesia, who was visiting Nusantara a few days after two technocrats were sacked without explanation, broke ground for schools and office complexes, promising foreign investment.

The president has announced his signature project to alleviate the pressure on the overcrowded, traffic-clogged, polluted and sinking city of Jakarta. But no foreign funding was committed.

The spokesperson for the president referred questions regarding Nusantara’s future to comments made by former President Widodo, who said that Nusantara will proceed as planned.

Jokowi (as the president is called) leaves office in October, after serving two maximum terms. His legacy project faces many problems, such as land issues, water supply, threats of tropical diseases like malaria, and widespread resistance among civil servants.

Prabowo Subito, the president-elect, could prove to be a bigger obstacle.

Prabowo, who won the February election on a promise of “continuity”, has his own legacy project: a $29-billion “free meal” program to combat stunting.

One politician who has direct knowledge of the situation told Reuters that Prabowo, in private, is still deciding whether to move to Nusantara. He also pledged to develop it at a similar pace, but it’s unlikely to happen as quickly.

A spokesperson from Prabowo didn’t immediately respond to a request for comment. However, publicly Prabowo said that he was committed to continuing with the project.

A senior politician said that members of Prabowo’s coalition had also privately expressed doubts regarding the ability of the state budget in funding both the new capital as well as the nutrition program.

Kevin O’Rourke, a political analyst, said that if resources became scarce (Nusantara), it could be pushed to the backburner. There will be fierce competition among other expenditure items under the Prabowo government.


Indonesia’s Nusantara, a smart, green city with flying taxis and a futuristic vision, is more ambitious in terms of technology and logistics than other new administrative capitals such as Myanmar Naypyidaw and Malaysia Putrajaya.

The government plans to send thousands of civil servants to Nusantara in September. However, some people are reluctant to leave.

Reuters spoke with almost a dozen civil service employees, and only two said they wanted to move. Others said that if asked, they would be willing to quit or seek a transfer.

One civil servant from the Communications Ministry said, “There are no facilities there. There is no health care, education, etc.” “It was not a decision, but a sacrifice.”

Danis Sumadilaga is the head of Nusantara’s infrastructure task force. He said that the government will ensure basic facilities such as apartments, water, electric and internet are ready for civil servants to arrive.

We are going to work there, what facilities do you want? “You can’t expect Jakarta to be the same,” he said recently in an interview.

In August, when Indonesia celebrates its independence, other key government buildings, including the presidential offices, state palace, as well as some ministerial building, will be completed.

Chris Wren CEO of BritCham said that foreign investment had been held back because of the election and its associated risks. However, interest is now increasing, he added.

He said that there were investors interested in a wide range of opportunities and needs – smart city technology, infrastructure, utilities, education etc. “However the feeling remains that the pitch at this stage is still far from perfect.”

Experts in public health have expressed concerns about malaria. East Kalimantan is the Indonesian region of Borneo, where the capital of the new country is located. It has the second highest rate of the mosquito-borne illness.

Epidemiologists claim that although the government claims that malaria is not present in the capital, there are still undocumented workers logging illegally nearby forests.

Data from the official sources shows that the malaria rate in Balikpapan (the closest city to Nusantara) has more than doubled between 2022 and 2023.

Iqbal Ellyazar from the clinical research unit of Oxford University in Jakarta said: “If they don’t take care, I suspect that malaria cases will rise in the next six to twelve months.”

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