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Analysis: Leaning toward collapse, what’s next for Nusantara?
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The Presidential Palace to-be in Nusantara, North Penajam Paser regency, East Kalimantan, undergoes construction work on July 11, 2024.
(AFP/Yasuyoshi Chiba))
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mid nationwide budget cuts, former president Joko “Jokowi” Widodo’s ambitious Nusantara capital city project is on the brink of failure. Under the current administration of Prabowo Subianto, the Nusantara project has taken a step back in priority in lieu of funding his own flagship free nutritious meal program and his food and energy self-sufficiency vision.
Prabowo’s recent fiscal tightening has stirred nationwide controversy, including freezing funds for his predecessor’s legacy project. “The budget realization for Nusantara doesn’t seem to be there yet. Like I said earlier, our budget is completely blocked. Why are you asking about progress when there’s no budget?” said Public Works Minister Dody Hanggodo.
This also comes after the Public Works Ministry, responsible for financing the megaproject, received budget cuts of up to Rp 81.37 trillion, leaving it with only Rp 29.57 trillion to work with this upcoming year.
Following Dody's statement, several government officials came out to contain the damage. Presidential spokesman Hasan Nasbi claimed that the frozen funds did not mean the termination of the project. “The budget freeze isn’t because the funds don’t exist, right? The budget just hasn’t been released yet,” Hasan said.
Coordinating Infrastructure and Regional Development Minister Agus Harimuti Yudhoyono also chimed in assuring that the construction of Nusantara would continue under the new administration with Rp 48.8 trillion in total to be allocated between 2025 and 2029. The funds will specifically be used to create buildings designated for the executive, judicial and legislative branches of government to ensure that the city can become Indonesia’s political hub by 2028.
However, Agus also stated that all infrastructure projects, including Nusantara, must provide clear benefits to the public and follow the President’s “vision”.
Analysts have pointed out that the continuation of this project will only contribute to greater financial loss for the country. During his tenure, Jokowi frequently boasted that foreign investors were lining up to invest in the new capital, yet, to this day the construction of this megaproject has been mostly built under state funding. “Until now, there hasn’t been a single major foreign investor,” one critic said.
