) to replace Jakarta as its national capital. Located in the province of East Kalimantan, the city is spread across parts of the Kutai Kartanegara and North Penajam Paser regencies, covering an area roughly four times the size of Jakarta. As the new capital is designed as a green city, it intends to integrate smart city technologies and rely mainly on renewable resources. The Indonesian government has budgeted more than 39 trillion Indonesian rupiah for the
in 2024. The multibillion-dollar project is expected to have significant economic impacts on industries like construction, real estate, and energy and ultimately promote regional growth in Kalimantan.
Why is Indonesia moving its capital city?
Over the years, Jakarta has grappled with unremitting issues such as overpopulation, an alarming sinking rate, and air pollution. The megacity accounts for nearly four percent of
Indonesia’s total population, with a disproportionately higher
population density compared to other provinces. It has one of the
highest traffic congestion and
air pollution levels in the Asia Pacific. Additionally, development in Indonesia has been centered on Java Island for decades. The relocation aims to reduce developmental disparities between Java and other islands across the archipelago while preserving Jakarta as one of Indonesia’s primary economic hubs.
East Kalimantan as home to the new capital
Some strategic factors support the decision to select Nusantara’s location in East Kalimantan. It is positioned centrally within the archipelago, has a low risk of
natural disasters, and is close to major cities such as Balikpapan and Samarinda. East Kalimantan is abundant in natural resources as it lies on Borneo Island, which is known for its rainforests and rich biodiversity. The province has the largest coal reserves and is one of the
main producers of palm oil in Indonesia. However, concerns have been raised regarding the preservation of natural environments and the impact on local or indigenous communities in Nusantara’s development. In 2023, the project led to
agrarian conflicts involving thousands of hectares of land in dispute. Despite the promising visions of Nusantara as a modern city, ensuring balanced development with sustainability and social equity remains a crucial consideration.
Nusantara’s full development by 2045
The Indonesian government plans to develop the city in phases, with full development completed by 2045. Since 2022, the project has focused on building basic infrastructure to prepare the city for its inauguration and first occupancy in August 2024. As part of the initial phase, the presidential office, along with other key government offices and the relocation of civil servants, are set to move to Nusantara in 2024. The project has attracted investments across various sectors, with over 300
letters of intent received by the end of 2023. By 2045, Nusantara expects a population of around 1.9 million, with the aim of achieving a
zero-carbon emissions target.
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