Berliner Boersenzeitung - Indonesia's delayed new capital risks 'white elephant' status

The legacy project of former president Joko Widodo is battling a slashed budget, slowed construction and a deficit of interest from a new leader focused on social mega-projects.

That has raised questions about whether the city, carved out of the jungle to replace crowded and rapidly sinking Jakarta, will ever see its promised potential.

"The political will on IKN right now feels muted," said Dedi Dinarto, senior associate at public policy advisory firm Global Counsel, referring to the new capital's official name: Ibu Kota Nusantara.

President Prabowo Subianto "is clearly putting his chips on welfare instead".

Just over 1,000 city authority employees live in Nusantara, along with a few hundred more ministry workers and service and medical employees.

That's far short of Jakarta's 12 million residents, and the new city's goal of two million inhabitants by 2045.

Prabowo mentioned IKN just once in his first state of the nation speech, and has slashed funding for the project.

Official budgets show a cut from 43.4 trillion rupiah ($2.66 billion) in 2024 to just 6.3 trillion rupiah in 2026. The authority had requested more than 21 trillion rupiah for 2026's budget.

Significant foreign funding has also proved elusive despite overtures to allies in the Middle East and Asia.

"Prabowo feels that this is not his legacy. It's not his big push and he has more programmes that he wants to push," an official involved in the city's construction told AFP on condition of anonymity.

"I'm still 50-50 on it (being finished)," the official added, saying the budget cuts mean "a lot of things will not be completed".

- 'Your loss' -

The former president, known popularly as Jokowi, revived the long-proposed capital move when he won a second term in 2019.

But despite a rush to build, the city was not inaugurated as Indonesia's new capital on August 17 last year as expected.

"In Joko Widodo's time it was very fast-moving, now in Prabowo's time... it's not as fast," said Sofian Sibarani, the city's designer.

Just 800 of the planned 6,600 hectares of the core government area have been developed on or prepared for construction, he said.

Nusantara officials are undeterred, and tout the city as Indonesia's future power centre.

City authority head Basuki Hadimuljono told AFP that projects in a smaller executive area housing the palace and ministries in the government core were "already 97-98 percent" complete.

He claimed Prabowo wants to move in 2028 before the next presidential election, once the legislative and judicial areas are finished.

As president-elect, Prabowo said he wanted to "continue, if possible finish" the capital move, but since taking office he has yet to express any plans to sign the presidential decree needed to shift from Jakarta.

"It would be signed after the legislative and judicial areas are completed" in 2028, said Basuki.

"If you do not want to move here, or you have a doubt, it is your loss," he added.

Some government employees have expressed reservations about moving to an unfinished jungle city, located around 1,200 kilometres (745 miles) from Jakarta.

But city employee Helena, who like many Indonesians goes by one name, insisted her unfinished tower block offers "an amazing level of comfort".

"And the facilities we get are more than enough," the 45-year-old told AFP.

The city now has three functioning hospitals, coffee shops, a toll road to nearby Balikpapan city and an airport waiting for commercial flight approval.

A planned shopping mall and cinema remain unbuilt.

- 'Really cool' -

Outside the palace in the ceremonial plaza, dozens of tourists were taking in the promised new capital with gusto.

"I am happy and proud... IKN is really cool," said Ronald Telaumbanua, 38, who travelled from Sulawesi island.

The striking presidential palace, modelled after the mythical Garuda bird, is a draw for photographs, but the city's lush green centrepiece offers little else.

Businesses counting on a boom of arrivals say they are struggling.

"During the Jokowi era, there were many workers, and there were numerous visits. Almost every day was busy," said Abduh Rajab, 57, a snack seller near the developed city centre.

"My earnings have dropped significantly, by almost 60 percent. But I have to stay optimistic. I hope the construction will continue."

Dedi said former general Prabowo was likely to remain focused on flagship policies, such as offering free meals to children and pregnant women.

"That means IKN will not see breakneck development anytime soon," he said.

"Without strong momentum, it risks drifting into white elephant territory."

(T.Burkhard--BBZ)