Indonesia's ambitious plan to relocate its capital from the rapidly sinking megacity of Jakarta to a newly built city in the Borneo jungle has encountered significant setbacks. The project, named Nusantara, was announced in 2019 by then-president Joko Widodo with an estimated cost of $32bn and an original target for inauguration in 2024. More than a year after that scheduled date, the city remains under construction.
A government regulation published in September has formally downgraded Nusantara's status, designating it as the nation's 'political capital' rather than its full 'national capital'. Officials have insisted the change reflects a commitment to completing the city's core functions by 2028, but the budget for the project has been substantially reduced under Indonesia's new president, Prabowo Subianto.
Critics have labelled the project a 'white elephant', pointing to the failure to attract the private foreign investment needed to cover 80% of the estimated costs. By mid-2025, only 800 hectares of the planned 6,600-hectare central government area had been developed, including a presidential palace designed in the shape of the mythical Garuda bird.
Authorities say the project has entered a 'second phase', with work under way on public transport, civil servant housing, and legislative and judicial buildings. Their target is to have 20% of government buildings and half of the housing completed, with core infrastructure at 50% capacity, by 2028. However, concerns mount over the impact of deforestation on Borneo's indigenous communities and biodiversity. The city is still scheduled for full completion by 2045, with the aim of housing two million people.
