Indonesia spends an additional $1 billion to accelerate the relocation of its capital.

The Indonesian Parliament's Budget Committee has allocated an additional $1.01 billion to accelerate the construction of the new capital, Nusantara.

Said Abdullah, chairman of the Indonesian Parliament's Budget Committee, said that $1.01 billion will be allocated to construction projects in the capital Nusantara this year, supplementing nearly $1.5 billion previously allocated. "The goal is for the Indonesian president to be able to move to the new capital by June 2024," he said during a meeting with government officials today.

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

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

President Joko Widodo pledged that the government budget would only cover 20% of the $32 billion cost of the capital relocation project, with the remainder to be raised from the private sector. However, no investment agreement has been signed yet, as investors remain concerned about the feasibility and sustainability of the project, especially as Indonesia prepares for presidential elections in February 2024.

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

Nusantara is located about 2,000 km from Jakarta and is built on an area of approximately 56,180 hectares. Plans to relocate the capital have been proposed by many Indonesian presidents, but none have progressed as far as this project has.

Jakarta, with a population of over 10 million, faces severe traffic congestion, flooding, and air pollution. The city is also sinking by up to 25 cm per year in some areas, double the average for major coastal cities globally. Some experts predict that one-third of Indonesia's current capital could be submerged by 2050.

Indonesian Minister of Public Works and Housing Basuki Hadimuljono said in February that Nusantara's infrastructure was 14% complete. The government expects to inaugurate the new capital on National Day, August 17.

Vu Anh (According to Reuters )

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