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View all search resultsPresident's muted Nusantara support chills investment
The President made no mention of the country’s future capital city under construction in East Kalimantan in his State of the Nation address last Friday.
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President Prabowo Subianto (center) talks with Vice President Gibran Rakabuming Raka (right) and former President Joko Widodo before the ceremony commemorating the 81st anniversary of Indonesia’s independence at the State Palace in Jakarta on Aug. 17, 2026. (Antara/Bayu Pratama S)
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lack of top-level public endorsement of Nusantara has clouded the future capital’s commercial prospects as investors hold back while waiting for the government to deliver on its promises to move people and economic activity from Jakarta to the new city in East Kalimantan.
President Prabowo Subianto made no mention of the megaproject’s development in his State of the Nation address last Friday or when presenting the 2027 state budget plan to the House of Representatives later that day.
The 2027 state budget bill circulated by the government on Monday earmarks Rp 6.7 trillion (US$377 million) for the Nusantara Capital City (IKN) Authority, up from Rp 6.3 trillion this year, but a fraction of the Rp 89 trillion spent on the project from 2022 to 2024 under the administration of then-president Joko “Jokowi” Widodo.
Of the 2027 allocation, Rp 5.3 trillion would be used to continue the construction of legislative and judicial facilities, with the remainder going toward project management, according to the IKN Authority.
“The relocation of the capital clearly does not appear to be a priority for Prabowo, as it is seen as a sunk cost,” Center of Economic and Law Studies (CELIOS) executive director Bhima Yudhistira told The Jakarta Post on Thursday.
The government had shown no sign of accelerating the relocation of civil servants or channeling new investment through state asset fund Danantara, while Nusantara’s operating and maintenance costs keep piling up, Bhima said.
Without significant new investment, Nusantara risked becoming a costly drain on the state budget, with the government still servicing the debt incurred to build it, he added.
