Nusantara: Indonesia’s Bold Plan for a New Capital Faces Big Challenges

Indonesia has embarked on a historic journey to build a new capital city, Nusantara, in East Kalimantan on the island of Borneo. This ambitious project began as a response to severe overcrowding, pollution, and land subsidence in Jakarta, the current capital, which is home to more than 12 million people. The government’s vision is to create a modern, sustainable city that will act as the administrative and political center of the country—yet turning this vision into reality is proving to be a complex challenge. The idea for Nusantara was first announced by President Joko Widodo, who hoped the move would reduce strain on Jakarta and stimulate greater economic growth in outlying regions. The vision includes five major construction phases stretching all the way to 2045, coinciding with Indonesia’s 100th anniversary. The first phase kicked off in August 2022, focusing on building the presidential palace, offices for key ministries, and housing for thousands of civil servants. By early 2025, the presidential palace and several ministerial buildings were structurally complete. Essential infrastructure—such as electricity, water supply, and sanitation—was also put in place to support the initial influx of government employees. Despite these milestones, Nusantara still feels a long way from becoming a thriving metropolis. Only a few thousand city authority workers and civil servants have moved in, far short of the goal of attracting two million inhabitants by 2045. Construction continues, but funding bottlenecks have slowed progress. The budget allocated to the project by President Prabowo Subianto, who succeeded Widodo, was cut sharply after he took office, reflecting a shift in priorities toward social welfare programs. Recent official figures show the budget for Nusantara shrinking from over forty trillion rupiah in 2024 to just over six trillion rupiah planned for 2026. At the same time, the city’s planners hoped for more than three times that amount to meet ambitious targets. Attracting private sector investment has emerged as a critical hurdle. The government envisions 80% of the funding coming from businesses, but as of mid-2025, only a fraction of this goal has been realized. While over $4 billion in investment has been secured from both domestic and foreign companies, significant international interest remains elusive. Noteworthy recent deals include the construction of university campuses, new schools, and hospitals, which are expected to create an ecosystem focused on innovation, education, and healthcare. Nusantara is designed to be more than just an administrative center. Planners emphasize green spaces, cutting-edge digital infrastructure, and clean energy. The city intends to run fully on renewable power and set new standards for sustainable urban living in Asia. There are gleaming new highways, apartment towers, and even an airport that is already handling domestic flights. Tours and visitors have begun trickling in, and for the first time, Indonesia celebrated its Independence Day in Nusantara in 2024. However, concerns persist. Many fear that the city could become a “white elephant,” with gleaming but underused buildings if population and investment targets are not met. Environmentalists warn of deforestation and threat to local wildlife. Some locals have expressed frustration with the pace of development and the perceived lack of inclusion in decision-making. The challenge of moving not just government offices but entire communities—and creating jobs, schools, hospitals, and vibrant neighborhoods—is substantial. President Prabowo has stressed his commitment to finishing the work started by his predecessor. His administration has made Nusantara one of Indonesia’s National Strategic Projects, and he hopes that by 2028, the legislative and judicial branches of government will also have offices in the new city. Officials plan to officially move the capital once all core facilities are fully operational, with hopes that Nusantara will eventually host key government sessions and international events. As Indonesia pushes forward, Nusantara stands as both a symbol of national ambition and a test of long-term planning. Its success will depend not only on government commitment and investment but also on the ability to make the city an attractive, livable home for millions. For now, Nusantara’s story is still being written—as a bold promise for the future, waiting to be fulfilled.