President Prabowo Subianto reaffirmed his support for the $32 billion Nusantara capital project during his first overnight visit, signaling continued government commitment. The Nusantara authority says executive offices are ready and legislative and judicial buildings aim for completion by 2028. Financial constraints — including a 48.8 trillion rupiah allocation to 2029, a 2.92% of GDP deficit in 2025, and reduced investor land-right durations — raise questions about funding and the project’s timeline.
Prabowo Reaffirms Backing for $32 Billion Nusantara Capital During First Overnight Presidential Visit
FILE PHOTO: View of the Presidential Palace in the planned new capital city of Nusantara, in East Kalimantan province, Indonesia, August 17, 2024. REUTERS/Willy Kurniawan/File Photo
JAKARTA — President Prabowo Subianto used his first overnight stay in Nusantara to reiterate his commitment to the $32 billion project to build Indonesia’s new capital, the government said.
Questions about the future of the Nusantara project have persisted since Prabowo took office in October 2024. The plan, originally announced by former President Joko Widodo in 2019, aims to relocate Indonesia’s capital roughly 1,200 km (745 miles) from overcrowded and sinking Jakarta on Java to a remote site in southeastern Borneo.
Construction in the new capital area began in 2022 after pandemic-related delays. Widodo had hoped to relocate the government by the end of his term in 2024 but did not meet that target.
Government Statements and Timelines
Prabowo’s office said the visit, scheduled through Tuesday, “marks an important momentum for the journey to build the Nusantara capital city.” The statement added that the president’s presence demonstrates the government’s commitment to ensuring development proceeds according to plan and in a sustainable manner.
“President Prabowo’s presence in Nusantara demonstrates the government's commitment to ensuring the development in the area proceeds according to plan and is sustainable.”
The Nusantara National Capital Authority, which oversees the development, said that offices and supporting infrastructure for the executive branch are ready. It also reported that construction is underway to meet a 2028 target for completing buildings for the legislative and judicial branches.
Financial and Legal Challenges
Prabowo approved a budget allocation of 48.8 trillion rupiah (about $2.89 billion) for the project through 2029 — roughly 60% of what Widodo’s administration spent on Nusantara between 2022 and 2024. Analysts warn that the president may face limited fiscal space to advance his broader policy agenda while continuing large-scale funding for Nusantara.
Prabowo’s government recorded a budget deficit of 2.92% of GDP in 2025, one of the largest in two decades and close to the legal ceiling of 3% of GDP. Separately, the Constitutional Court last year halved the maximum duration of land rights available to investors in Nusantara, a move seen as an additional obstacle to attracting private capital.
Outlook
Prabowo’s visit sends a clear political signal that his administration intends to proceed with the Nusantara build-out, but fiscal constraints and recent legal changes affecting investor land rights are likely to shape the pace and scope of future development. The government will need to balance budgetary limits with the ambition of delivering a green, modern capital on schedule.
($1 = 16,870.0000 rupiah)
Reporting by Gayatri Suroyo and Stefanno Sulaiman; Editing by Kate Mayberry.
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