Indonesia's New Capital--Updated
- Lex Rieffel
- Jul 29
- 3 min read
The site of the new capital selected by President Jokowi is in the province of East Kalimantan, on the coast facing the island of Sulawesi. Kalimantan (previously Borneo) is Indonesia's largest island territory; Sulawesi (previously Celebes) is the fourth largest.
There are good reasons for creating a new capital to succeed Jakarta on the island of Java. For example, Jakarta is sinking.
In the course of some policy research I did on new city development in Myanmar/Burma in the 2009-2013 period, I made the acquaintance of one of America's top practitioners of new city development: Michael Castle-Miller. When the site for Indonesia's new capital was announced in 2019, Michael agreed to co-author with me an essay on what could make the project a success, based on global best practice.
Happily, we were able to get our essay published in the East Asia Forum Quarterly, a magazine sold on newstands across East Asia. Unhappily, our essay appeared in the EAFQ issue that came out in March 2020, coinciding with the declaration of the Covid-19 pandemic. As a result, it did not receive the attention that we had lined up within the Indonesian policy community. Even a short version of our essay posted on the EAF website in May 2020 got buried in postings about the pandemic. (The EAFQ and its related blog are produced by the Australian National University in Canberra.)
In October 2023, I had the good fortune to be able to visit the site of the new capital, given the name Nusantara. My visit was facilitated by a formal invitation from the project authority (Otorita Ibu Kota Nusantara-OIKN) arranged by the Indonesian embassy in Washington DC. The purpose of the visit was to be able to produce an eye witness update on the project. This planned update was deliberately put off until Jokowi's successor, President Prabowo Subianto, was inaugurated in October 2024. My assessment of the project was very critical and I didn't want to embarrass the Indonesian embassy that had made my visit possible.
The update I drafted was eventually ready for publication in April 2025. Naturally I submitted the update to the East Asia Forum. They rejected it. I then submitted it to two other outlets, one in Australia and the other in Singapore. It was rejected by both. I decided to "bury" my essay after sending it to an Indonesian friend at a research institute in Singapore. He explained that the Nusantara project was no longer a priority of the Indonesian government.
The last straw was a podcast on the Nusantara project posted on 24 July 2025 on the website of the ISEAS research institute in Singapore. This podcast struck me as an unbeatable report on the status of the project. Here is a link to it:
There are three possible benefits of posting the draft update on my website:
--It includes a couple of photos that illustrate two of my deep concerns about the project. One concern is the topography of the project area. The other concern is the megalomania revealed in the design of the presidential palace.
--It returns to the issue of "Land Value Capture" as a better way of financing infrastructure for the project area.
--It includes 10 possible steps for overcoming the mistakes made so far that could within 5-10 years make Nusantara a liveable city that attracts spontaneous migration from Jakarta and elsewhere in Indonesia.
Read the Update Below or click here to download PDF
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