Indonesia’s new capital city: A vision of innovation and growth

The relocation showcases a visionary approach towards sustainable development, economic growth, and technological innovation 

Indonesia aims to create a model capital city that sets new standards for urban living. DonniYudhaPerkasa/Shutterstock

In 2019, Indonesia announced its groundbreaking move to relocate its capital city from Jakarta to a new location on the island of Borneo. This ambitious project aims to alleviate the challenges faced by Jakarta, such as overcrowding, traffic congestion, and environmental issues. Despite these potential benefits, the decision has been met with both enthusiasm and scepticism, but the Indonesian government remains determined to create a sustainable and liveable city for future generations. 

Chief Bambang Susantono, the head of the Nusantara Capital Authority, spoke about the motivations behind this monumental decision. In an interview with Al Jazeera, Susantono highlighted the urgent need to address Jakarta’s pressing problems, including frequent flooding and worsening air pollution. He emphasised that the new capital will be built with a focus on sustainability, incorporating green spaces, efficient transportation systems, and advanced waste management. 

Collaboration is key in transforming this vision into reality. Indonesia has partnered with Singapore to develop the new capital named Nusantara. The partnership aims to leverage Singapore’s expertise in urban planning and technology to create a modern and environmentally friendly city. According to Antara News, this collaboration seeks to make Nusantara a model for other cities in Southeast Asia. 

To attract domestic and international investment, Indonesia has introduced a series of incentives and initiatives. The government has offered tax cuts and other benefits to lure investors to the new capital, as reported by Bloomberg. These measures aim to create a favourable business environment and stimulate economic growth in the region. 

The development of housing infrastructure is a crucial aspect of the new capital project. Reuters reported that Indonesia has broken ground on a USD27 billion housing project, which will provide affordable housing for residents. However, there are differing opinions regarding the impact of the new capital on land values. Some individuals see the potential for a land boom, while others express concerns about displacement and rising costs, according to another Reuters article. 

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The government remains committed to involving local companies in the development of Nusantara. The Borneo Post states that the Indonesian government will continue to facilitate the participation of local businesses, ensuring their active involvement in shaping the new capital. 

With the ongoing development of the new capital, companies honoured at the PropertyGuru Indonesia Property Awards are recognising the growing demand and potential for profitable investments in the years ahead. 

The immense financial requirements of this ambitious endeavour have prompted the government to increase spending in 2024 to complete strategic projects, including the new capital city. Zawya uncovered that this additional funding will be allocated to critical infrastructure development and other essential elements of the new capital. 

As Indonesia embarks on this historic project, questions arise about the attractiveness of the new capital for its future residents. The Diplomat highlighted factors such as improved quality of life, job opportunities, and the promise of a sustainable environment as primary reasons why more people would live in the new capital. 

While the relocation is a monumental undertaking with its fair share of challenges, the Indonesian government remains steadfast in its commitment to building a future-ready city. By leveraging partnerships, providing incentives for investors, and prioritising sustainable development, Indonesia aims to create a model capital city that sets new standards for urban living. The journey towards Nusantara is poised to shape Indonesia’s future and inspire other nations to reimagine the possibilities of urban planning.

Witnessed any award-worthy residential, commercial, or industrial projects in Indonesia? Nominate them for the 9th annual PropertyGuru Indonesia Property Awards on or before 25 July 2023. To know more, visit AsiaPropertyAwards.com/Indonesia 

Gynen Kyra Toriano, Digital Content Manager at PropertyGuru, wrote this article. For more information, email: [email protected].