Indonesia’s Prabowo affirms commitment to new capital city in first visit as president

JAKARTA - Indonesian leader Prabowo Subianto reiterated his commitment to a US$32 billion (S$41.2 billion) project to

build the country’s new capital city

as he made his first overnight stay there as president, the government said.

Questions about the fate of the

Nusantara capital city project

have lingered since Mr Prabowo took office in October 2024.

The project is a legacy of his predecessor, Mr Joko Widodo, who first announced his plan to move the capital 1,200km away from overcrowded and sinking Jakarta on Java island in 2019.

Construction of the city in a remote, south-eastern part of Borneo island began in 2022 after delays due to the Covid-19 pandemic, and Mr Widodo missed his target of moving the government by the end of his second and final term in 2024.

Analysts have said Mr Prabowo is unlikely to have the fiscal space to fund his key programmes while continuing to build Nusantara, which Mr Widodo had envisioned as a green, futuristic capital surrounded by forest.

Mr Prabowo’s visit, scheduled until Jan 13, “marks an important momentum for the journey to build the Nusantara capital city”, his office said in a statement late on Jan 12.

“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,” it said.

The Nusantara National Capital Authority, which oversees the development, said in a separate statement that offices and supporting infrastructure for the executive branch were ready.

Construction was underway to meet a completion target of 2028 for buildings for the legislative and judicial branches of government, it said.

Mr Prabowo in 2024 approved a budget of 48.8 trillion rupiah (S$3.7 billion) for the project until 2029, only about 60 per cent of what Mr Widodo spent between 2022 and 2024.

Mr Prabowo’s government ran a budget deficit of 2.92 per cent of gross domestic product (GDP) in 2025, among the largest in two decades and close to a legal deficit ceiling of 3 per cent of GDP.

The Constitutional Court in 2025

halved the maximum duration of land rights

for investors in Nusantara, dealing another blow to the project. REUTERS