Tenggarong, E Kalimantan (ANTARA) - There is a need to accelerate economic transformation in Kutai Kartanegara District in East Kalimantan ahead of the capital transfer to Nusantara City, the National Research and Innovation Agency (BRIN) said.

"This needs to be done because the Nusantara development may cause the loss of Rp2 trillion (US$128.4 million) in potential mineral, coal, and gas and oil production sharing funds (DBH) every year," head of the BRIN's Governance, Economy, and Community Welfare Research Organization, Agus Eko Nugroho, said here on Sunday.

According to the BRIN's study, the total potential loss of regional revenue in Kutai Kartanegara due to the Nusantara development can reach Rp5.8 trillion, or around US$372 million, every year.

For this reason, Nugroho recommended compensating the loss by increasing the General Allocation Fund (DAU).

He said that as the DBH of mineral and gas production will eventually be erased due to the expiration of operating permits, Kutai Kartanegara, as the buffer area of Nusantara, needs to carry out economic transformation.

He said that the district government needs to make a number of efforts to enhance regional income, such as by ensuring that regional spending is efficient and digitizing tax collection.

Previously, during the National Seminar "Encouraging Fair and Responsible Center-Regional Financial Relations" in Jakarta on Tuesday (December 5), Nugroho said that Kutai Kartanegara needs to optimize the presence of Nusantara as a new revenue source.

Head of the district's Regional Research and Innovation Agency (BRIDA), Maman Setiawan, said that parts of Kutai Kartanegara District are included in the Nusantara buffer area, based on Law No. 3 of 2022 concerning the National Capital.

The six sub-districts that are part of Nusantara are Samboja, West Samboja, parts of Muara Jawa, Loa Kulu, Loa Janan, and Sangasanga.

Related news: Ministry prepares for Nusantara Day event in Tidore
Related news: Urban mobility is backbone of new capital Nusantara: OIKN
Related news: Contribution to climate action from Indonesia's new capital Nusantara

Translator: M Ghofar, Kenzu
Editor: Azis Kurmala
Copyright © ANTARA 2023