Indonesia Launches Foreign Investment Projects in Nusantara Capital

Indonesia is embarking on a significant journey as it relocates its capital from the bustling city of Jakarta to a new site called Nusantara, located in East Kalimantan on Borneo island. This ambitious project, which is part of a $32 billion initiative, aims to alleviate the overcrowding and sinking issues that Jakarta faces. The groundbreaking ceremony held on Wednesday by outgoing President Joko Widodo marks a pivotal moment, as it signifies the first foreign investments in this megaproject.

During the ceremony, President Widodo announced that investments are coming from Australia, Russia, and China. He stated, "This morning, we broke ground for education investment from Australia. Then we also broke ground for property development by Russian investors. And … we are about to do another groundbreaking (project) for a mixed-use property development from Delonix Nusantara, from Chinese investors." This highlights the international interest in Nusantara, which is being positioned as an attractive location for future investments.

The Chinese property firm Delonix Group is set to invest $33 million in a complex that will include hotels, offices, and community retail spaces. Meanwhile, the Australian Independent School and Russia’s Magnum Estate are also contributing, with investments of approximately $9.9 million and $19.8 million, respectively. These investments are crucial as they not only bring in capital but also expertise and innovation to the new capital.

Since the announcement of this relocation plan in 2019, the project has faced several challenges, including construction delays and difficulties in attracting foreign investment. The Indonesian government aims to rely heavily on private investors, with only 20 percent of the total funding expected to come from government sources. President Widodo mentioned that while many letters of intent have been signed, officials are being selective about which projects to pursue, ensuring they align with the needs of Nusantara.

This new capital city is seen as a legacy project for President Widodo, who plans to spend his final weeks in office there. His successor, President-Elect Prabowo Subianto, will officially take over on October 20. The transition of leadership raises questions about the future direction of the Nusantara project and whether it will continue to attract the necessary investments to thrive.

The groundbreaking of foreign investment projects in Nusantara is a significant step forward for Indonesia. It reflects the government's commitment to creating a modern and sustainable capital that can support its growing population and economy. As the world watches, the success of this initiative will depend on the ability to attract further investments and navigate the challenges that lie ahead. The journey to build Nusantara is just beginning, and it will be fascinating to see how it unfolds in the coming years.