Indonesia spends another $1 billion to speed up capital relocation

The Indonesian Parliamentary Budget Committee allocated an additional $1.01 billion to speed up the construction of the new capital Nusantara.

The chairman of the Indonesian Parliamentary Budget Committee, Said Abdullah, said the budget of $1.01 billion will be spent on construction projects in the capital Nusantara this year, adding to the nearly $1.5 billion allocated earlier. "The goal is for the President of Indonesia to be able to move to the new capital by June 2024," he said in a meeting with government officials today.

Indonesia is working to complete administrative works at Nusantara, including the Presidential Palace and ministry headquarters, in the first half of 2024, as well as ensuring the capacity to accommodate 16,000 civil servants, police and military personnel arriving there next year.

The massive construction site of Indonesia's capital Nusantara in March. Photo: Reuters — The massive construction site of Indonesia's capital Nusantara in March. Photo: *Reuters*

President Joko Widodo has pledged that the government will only finance 20% of the $32 billion capital relocation project, with the rest to be raised from the private sector. However, no investment agreements have been signed yet, as investors remain concerned about the feasibility and sustainability of the project, especially as Indonesia prepares to hold presidential elections in February 2024.

Indonesian officials are set to begin construction on a new capital in mid-2022, after parliament approved a law to move the capital from Jakarta. President Widodo chose the name Nusantara, which means Indonesian archipelago in Javanese, to emphasize the country's motto of "unity in diversity."

Nusantara is about 2,000 km from Jakarta, built on an area of about 56,180 hectares. The plan to move the capital has been proposed by many Indonesian presidents but no one has gone as far as now.

Jakarta, with a population of more than 10 million, faces severe traffic congestion, flooding and air pollution. The city is also sinking as much as 25 cm per year in some areas, twice the global average for major coastal cities. Some experts predict that a third of Indonesia’s current capital could be underwater by 2050.

Indonesia's Minister of Public Works and Housing Basuki Hadimuljono said in February that Nusantara's infrastructure was 14% complete. The government hopes to inaugurate the new capital on August 17, the country's national day.

Vu Anh (According to Reuters )

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