Indonesia Racing to Build New Capital City as Jakarta Sinks
President Prabowo Subianto's reduced commitment to Nusantara—marked by halved 2026 funding and a shift to "political capital" terminology—raises questions about the project's viability.
Objective Facts
In 2019, Indonesia's government announced a bold plan to build Nusantara, a new capital from scratch on Borneo island. Since President Prabowo Subianto assumed office in October 2024, critics have questioned whether he shares the same enthusiasm as his predecessor, with state funding for the project cut in half for 2026 compared with the previous year. Last year, Prabowo signed a presidential regulation designating Nusantara as Indonesia's "political capital" by 2028—different from previous language calling it the "national capital"—a shift that confused other lawmakers and policy experts worried about a de-emphasis on the project. The uncertainty has fueled concerns, especially in the international press, that Nusantara could become a "ghost city," but Basuki Hadimuljono, the head of the Nusantara Capital City Authority, dismisses such concerns, saying "Don't worry. It will be continued." Indonesian media sources like KPPOD and Kompas.com reflect similar concerns about budget clarity and the need for stronger political commitment from the current administration.
Left-Leaning Perspective
International media outlets including NPR, Anadolu Agency, and South China Morning Post have expressed skepticism about Prabowo's commitment to Nusantara. NPR's April 16, 2026 report documents that state funding was "cut in half for 2026 compared with the previous year" and notes that "the uncertainty has fueled concerns, especially in the international press, that Nusantara could become a 'ghost city.'" Anadolu Agency reported in October 2025 that "drastic funding cuts, construction delays and dwindling population cast doubt on future of megaproject," adding that constitutional law scholar Herdiansyah Hamzah from Mulawarman University stated "the new capital is not a priority for Prabowo" and that "politically, it's unwilling to die, unwilling to live." These outlets emphasize environmental and social costs. NPR's correspondent reported that local environmental group WALHI says "over 2,000 hectares (4,940 acres) of mangrove forest have been destroyed," and that Fathur Roziqin Fen, executive director of WALHI East Kalimantan, expressed skepticism that the project could deliver on its promises of being a "smart city, forest city and green city." The South China Morning Post's September 2025 analysis framed the project as "at risk of becoming a costly monument to unfinished ambition" amid "funding cuts and political indifference." International coverage downplays official reassurances about commitment. While Basuki Hadimuljono told NPR the project would continue, the persistent focus on funding delays, the 14-month gap between Prabowo taking office and making his first visit to the site, and the change in terminology from "national" to "political" capital receive extensive scrutiny as evidence of reduced priority.
Right-Leaning Perspective
Indonesian government officials have presented a more optimistic framing. Basuki Hadimuljono told NPR that budget cuts were "reallocated, not cut," and cited Prabowo's personal statement: "The funding is there, the political commitment is there. Why should we doubt that?" The government's own official sources, including statements from the State Secretariat and Nusantara Authority website, emphasize continuity. KPPOD reported in January 2026 that Prabowo's first visit to the site was "a signal of positive support for the continuation of development of the new capital city," with Deputy Head of Commission II DPR Bahtra Banong stating "the president's presence at IKN is part of support for the continuation of IKN development." Kompas.com and other Indonesian outlets noted that Prabowo signed Presidential Regulation No. 79/2025 setting 2028 as the target for IKN to become Indonesia's "political capital," which government sources frame as a commitment signal. Government messaging emphasizes strategic value. The official Nusantara Authority website states that "IKN is not merely an infrastructure project, but a reflection of the nation's optimism toward a more advanced future without hesitation." Officials note that the project represents decentralization from Java and regional development for East Kalimantan. KPPOD sources stress the importance of clear budgeting and timeline certainty, but do not question the fundamental commitment. Official sources downplay terminology changes as neutral reclassifications. While acknowledging that some lawmakers found the shift from "national" to "political" capital confusing, government spokespersons present this as a legal clarification rather than a reduction in commitment, with Basuki stating the regulation is "a symbol of support from the president."
Deep Dive
The Nusantara project faces a fundamental credibility gap between official reassurances and material signals. The project itself addresses a real urban crisis: Jakarta, with over 40 million people, faces chronic flooding, severe pollution, and physical subsidence—a problem that transcends party politics. The 2019 announcement under President Jokowi represented a legitimate strategic response, and both Prabowo and his predecessor recognized the need. However, Prabowo's actions since October 2024 have created ambiguity that neither officials nor critics can fully resolve. The halving of budgets from $2.4 billion to $850 million, the 14-month delay before his first visit, and the shift from "national" to "political" capital are individually defensible—budget reallocation due to fiscal constraints, a focused working visit rather than symbolic ceremony, and legal precision rather than de-emphasis. Collectively, however, they send a mixed signal. Government officials arguing these actions reflect "reallocation" and "commitment" face skepticism because Prabowo is simultaneously pursuing his own priority programs (defense spending, infrastructure) that may compete for scarce resources. Constitutional scholar Herdiansyah Hamzah's characterization of the project as "politically, unwilling to die, unwilling to live" captures this limbo: the government continues construction and planning, but not at scale or pace that would deliver on original timelines. What distinguishes this from a straightforward policy reversal is that reversal would be politically costly for Prabowo. Canceling Nusantara would be seen as betraying his predecessor (whom he promised to succeed) and admitting a massive waste of prior expenditures. Instead, the current trajectory appears to reflect a minimalist approach: maintain the project to avoid political damage, but defer major expenditures and declare victory at a reduced scope by 2028 (declaring it a "political capital" before full buildout). For stakeholders—developers, displaced Indigenous communities like the Balik tribe, civil servants expected to relocate—this ambiguity is itself damaging. One final note: the regional economic stakes are real. Development in East Kalimantan has spillover benefits for decentralization. Indonesian outlets like KPPOD and Kompas focus on whether infrastructure can realistically support the goals, not on whether goals are legitimate.
Regional Perspective
Indonesian government and policy sources frame Nusantara primarily as a decentralization initiative with strategic regional importance for East Kalimantan. KPPOD reported that lawmakers and officials appreciated Prabowo's January 2026 visit as evidence of continuity, with Bahtra Banong stating the president's presence "shows direct support toward the government's national strategic agenda." Kompas.com and related outlets examined the project through constitutional and legal frameworks, analyzing the designation change and regulatory status with nuance rather than alarm. GovInsider Indonesia noted that while critics under Jokowi had questioned whether the project served as a "personal political ambition," the actual execution involves genuine regional development goals beyond any single leader's tenure. Indonesian policy analysis diverges from Western "ghost city" framing by emphasizing implementation challenges rather than fundamental commitment doubt. KPPOD sources acknowledged budget concerns and stressed the necessity of clear government budgeting allocations to sustain public confidence, but did not question whether the project itself was viable. An analyst quoted in KPPOD emphasized: "If this regulation is set, strong political commitment is needed. We cannot have future dynamics that change what is clearly laid out in the roadmap." This framing treats the issue as one of institutional follow-through rather than of political will at the outset. Regional media also contextualized the project within historical patterns. Kompas.id noted that capital relocations have recurred throughout Indonesian history, and that Nusantara represents part of a longer arc of state-building rather than a one-off Prabowo decision. This perspective de-emphasizes the current president's personal role and positions the project as a multi-generational undertaking, reducing pressure to deliver visible results by 2028.