To attract the private sector’s participation in the development of Indonesia’s new capital city Nusantara, East Kalimantan, the government should demonstrate seriousness and clear investors’ doubts on political stability ahead of the 2024 General Elections.
Nusantara is being prepared as a futuristic capital city that will become a milestone for equitable development when Jakarta is no longer able to support the burden that causes traffic congestion, flooding, and high pollution.
With the need for investment projected to reach Rp466 trillion (around US$29.69 billion), the new capital is also targeted to become a forest city, smart city, modern city, as well as eco-friendly city.
Nusantara’s development will take up to 15-20 years. Thus, the development needs policy continuity from an economic, political, and legal perspective despite the change of government.
The new capital is not only about economic and social matters, but there are also political and legal influences, considering that this big-scale project utilizes state resources on a large scale.
The government planned that 20 percent of the Nusantara development budget is sourced from the state budget (APBN), while the remaining 80 percent is from government-private partnerships or full financing from the private sector, among others.
Taking into account the important role of the private sector in Nusantara’s development, the government acknowledges the need to move quickly to provide core and basic infrastructure to support development.
During his working meeting at Nusantara’s location in late September of 2023, President Jokowi held groundbreaking ceremonies for the construction of two hotels owned by the private sector, a hospital, and football training center owned by the Indonesian Football Association (PSSI). He also reviewed the progress in construction of the Presidential Office.
Thereafter, on November 1-3, 2023, he had visited Nusantara again for the groundbreaking for the construction of Nusantara Capital Airport, two hospitals from private investors, a hotel, an apartment, a mall, an international school, the office of the Workers Social Security Agency (BPJS Ketenagakerjaan), the office of Bank Indonesia, a 50-megawatt solar power plant, and the revitalization of public elementary schools.
So far, the progress in construction of the Balikpapan Toll Road to Nusantara has reached 55 percent.
Acceleration in development of public facilities, such as schools, hospitals, and shopping centers, is being carried out to address doubts by the public and investors regarding Nusantara. With the construction of these public facilities, civil servants and the public should not hesitate to move into the new capital and live there.
The government has pioneered the construction of the 50-megawatt solar power plant that can produce green energy of 93 GWh per year and can reduce emissions by 104 thousand tons of CO2 per year.
For access to Nusantara, as of October 2023, the government was still accelerating the construction of the Balikpapan-Nusantara toll road that can cut travel time, from 2.5 hours to 45 minutes.
The government is targeting the construction of Nusantara Capital Airport to be completed in December 2024. The travel time from the airport to Nusantara’s core government area is only 18 minutes.
Various construction groundbreakings have been conducted, as the government is keen to prove its seriousness about developing the new capital. Through this seriousness, it is hoped that the private sector and businesses will immediately partake in the development.
The government also ensures the availability of basic infrastructure, such as electricity, water, and housing for government employees. Until December 2023, investments worth Rp45 trillion (around US$2.86 billion) will be ready to be realized in Nusantara.
Responding to doubts
The private sector and businesses certainly hope that Nusantara’s development would be sustained amid political excitement ahead of the 2024 General Elections.
To convince businesspersons, there needs to be a strong manifestation and commitment from the political elite level as well as a concrete realization of the progress in Nusantara’s development before the government changes in October 2024.
Deputy Chair of the Indonesian Furniture and Crafts Industry Association (Asmindo) Anne Patricia Sutanto stated that her side is ready to be involved in developing Nusantara despite concerns over political uncertainty and legal risks. There is a fear of taking a wrong step and ending up being investigated by law enforcement officials.
To this end, she urged the government to be careful in developing Nusantara. It is deemed essential that Nusantara’s development is not accelerated haphazardly but should also focus on legal aspects.
Nevertheless, President Jokowi has addressed investors’ concerns related to election factors.
According to Jokowi, the Indonesian nation has matured in democracy. Experience in holding direct elections in 2009, 2014, and 2019, had shown that Indonesia can maintain peace and harmony in the democratic process.
Moreover, he assessed that Nusantara has strong political legitimacy. The acceleration of Nusantara’s development is carried out based on Law Number 3 of 2022 on Nusantara that is supported by 93 percent of factions in the Indonesian House of Representatives (DPR).
Jokowi expressed optimism that the law will offer political and legal guarantee to investors looking to participate in developing the new capital.
The president also invited businesses to participate in maintaining stability and be wise in making public statements regarding the elections. He encouraged them to take the opportunity to participate in the development of Nusantara.
President Jokowi clarified that acceleration of Nusantara’s development is not carried out haphazardly.
He noted that the development of Nusantara, as a whole, will be completed in 15-20 years. The pace also depends on the participation of the private sector and businesses.
It is hoped that the rapid developmental progress from the government will encourage commitment of the private sector to jointly accelerate the development of Nusantara as a future city for future generations, which can only be realized through serious joint efforts.
Source: Antara News