Indonesia’s Parliament Approves USD 1 Billion Increase for Construction of New Capital

July 2023

Indonesia is ready to build its new capital, Nusantara, and the country’s parliament budget committee has recently granted an additional IDR 15 trillion (USD 1 billion) to expedite the project. The additional IDR 15 trillion is on top of the IDR 22 trillion (USD 1.4 billion) previously allocated for developing Nusantara on Borneo island in 2023..

The government intends to finish the capital’s principal administrative offices, including the presidential palace and essential ministry buildings, by the middle of 2024. At least 16,000 civil servants, military personnel, and police officers are expected to relocate to those facilities in 2024.

President Joko Widodo has pledged that just 20% of the project’s total cost, estimated at USD 32 billion, will come from government funds, with the remainder coming entirely from the private sector.

During a sustainability-focused conference, the president promoted his country’s planned new USD 32 billion capital to global investors, promising substantial investment returns. He projected significant profits on development packages totaling USD 2.6 billion to investors interested in creating Nusantara, betting that Indonesia’s consistent economic growth of roughly 5% and low inflation will attract investors.

(Sources: Reuters; WION)

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