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Indonesia's new capital Nusantara draws more investor interest after Prabowo presidential win

Jakarta Post - March 28, 2024

Singapore – Investor interest in Indonesia's proposed new capital Nusantara has been renewed, following official results that confirmed Defence Minister Prabowo Subianto will be the country's next president.

Much of the foreign investor interest has come from Singapore, according to Mr Bambang Susantono, head of the Nusantara Capital Authority, the Cabinet-level agency tasked with managing and developing the future capital.

In his election campaign, Indonesian President-elect Prabowo promised to continue the development of Nusantara, which was the brainchild of outgoing Indonesian President Joko Widodo.

"After the election, I could see the euphoria, some positive energy (for investment)," Mr Bambang told The Straits Times on the sidelines of the Indonesia-Singapore Business Forum 2024 held at the Hilton Singapore Orchard on March 27.

"The pace of discussions has picked up and it's now a high time for us."

Mr Bambang, a trained civil engineer and economist, added: "I think it's very clear that we have continuity and sustainability (for the Nusantara project). And the President-elect has visited us, he has also put his confidence in the project."

The ambitious dream of moving Indonesia's capital from Jakarta to a location some 2,000km away in the middle of a forest in East Kalimantan was the signature project for Mr Widodo, who is popularly known as Jokowi.

He will step down in October after a decade in office. He made the drive to modernise the nation's infrastructure a hallmark of his administration.

President-elect Prabowo pledged to continue the policies of the Jokowi administration, riding the tacit support of the popular incumbent to win almost 60 per cent of the ballots cast. His incoming Vice-President, Mr Gibran Rakabuming Raka, is Mr Widodo's son.

The mammoth project to relocate the capital, announced in 2019, will cost an estimated 466 trillion rupiah (S$39.5 billion). It has drawn criticism, including from Mr Prabowo's election rivals, about its environmental impact, and scepticism over whether it can attract foreign investment.

Mr Bambang said the Nusantara Capital Authority has received 369 letters of intent from interested investors to date, with most of the foreign investor pledges originating from Singapore.

He also said there are a "couple" of Singapore companies which have shown greater commitment beyond the written pledges.

"But I cannot disclose it at this time," he said, adding that his office typically holds three to four meetings in a day with interested parties who are not just keen to invest financially, but also to contribute in the areas of technology and renewable materials.

He said many delegations have asked to visit the site, from countries like Kazakhstan, Malaysia and Finland.

In May, more than 130 government officials and businessmen from Singapore – one of the biggest delegations – visited the 2,561 sq km site, which is about three times the size of Singapore.

Sharing recent pictures of the construction progress with attendees at the forum, Mr Bambang said that the presidential palace, the keystone of the new city, and the presidential offices are about 70 per cent completed.

These buildings will form the administrative heart of the new capital and are on track to be ready in time to host Indonesia's Independence Day celebrations on Aug 17.

The construction of Nusantara is expected to be completed in five stages, with the first phase to be done by 2024. Housing for Nusantara's first residents, who will be civil servants, the armed forces and the police, is expected to be done by July.

The relocation of other government workers will happen gradually, with the completion of essential infrastructure like schools, health facilities and roads in the coming years.

Nusantara is intended to relieve pressure on Jakarta, which is vulnerable to flooding owing to heavy rainfall and land subsidence, and is beset by traffic congestion and air pollution. Greater Jakarta is home to more than 30 million people.

But environmentalists have warned about the destruction of forests that are home to long-nosed monkeys and orang utans, with the development of Nusantara.

Indigenous communities around Nusantara also fear the prospect of relocation to give way to construction. Mr Bambang said they are working with all the local leaders to ensure they reach a consensus about the project.

"We want to see the locals better off and not worse off," he added.

Nusantara plans to be sustainable and high-tech, which will take various forms in its infrastructure. Buildings, for instance, will be required to be smart and green – the first standards of this kind in the country.

Planning a city from the ground up has also allowed Indonesia to align itself with international goals related to climate change, sustainable development goals and biodiversity conservation, said Mr Bambang.

"When you have new things like that, you have an opportunity to implement all the good concepts about a city. And that allows you to put people at the heart of everything," he said.

Source: https://asianews.network/indonesias-new-capital-nusantara-draws-more-investor-interest-after-prabowo-presidential-win