Daniel A. Fajri, Jakarta – President Joko "Jokowi" Widodo seemed to be fine with the slow foreign investment in the Indonesian Capital City of Nusantara or IKN project, stating that the government is prioritizing domestic investors.
"We still have a lot of local resources, so we should prioritize domestic ones first," he said in the IKN, Penajam Paser Utara, East Kalimantan, on Wednesday, August 14, 2024.
The president also expressed satisfaction with the overall process of the first phase of IKN development from 2022 to 2024, which focuses on the construction of government buildings.
He also announced plans for additional groundbreaking ceremonies following Indonesia's Independence Day on August 17, and that the IKN Authority Head would continue to select the submitted 472 Letters of Intent.
"10 projects are slated to commence. They are queuing," Jokowi said.
The lack of foreign investment in the IKN is considered to be one of the obstacles to the development of the new capital. The government needs an influx of funds to balance state budget expenditures.
The government has allocated Rp72 trillion from the state budget for IKN development from 2022 to 2024, with an additional Rp29.8 trillion requested by the IKN Authority Acting Deputy Head for the following year. Domestic investment has reached Rp56.2 trillion thus far.
The Finance Ministry has increased the IKN's budget by Rp1.9 trillion to Rp42.5 billion for 2024 to ensure high-quality infrastructure development, according to Director General of Budget Isa Rachmatarwata in Jakarta on Tuesday, August 13.
The government has allocated only 20% of the total Rp466.9 trillion budget to the IKN project, amounting to Rp90.4 trillion.
In addition to the government's financial contribution, President Jokowi announced that domestic investments in the IKN have reached Rp56.2 trillion, stemming from 55 initiated projects.