The new capital named Nusantara is designed to be a new center of economy.
The relocation of the capital city from Jakarta to Nusantara boils down to the main problem of uneven national economic development, as it relies on Jakarta and Java Island as the sole centers of economic growth.
Jakarta has served not only as a center of governance but also for other aspects, such as businesses, sports, and trade, and as a hub of education with the best facilities.
With numerous activities being centered in Jakarta, the city had become densely populated. The burden of carrying capacity then fell on the areas around Jakarta, such as Bogor, Tangerang, and Bekasi.
The vast population of Bogor, Tangerang, and Bekasi mostly earns a living in Jakarta, thereby necessitating them to commute to Jakarta every day. This massive mobility cannot be supported by road infrastructure in Jakarta, thereby resulting in severe jams at numerous points in the city.
The massive population growth and mobility also make the availability of piped water infrastructure in Jakarta and its surroundings inadequate, forcing people to use groundwater. This results in land subsidence in Jakarta and its surroundings, which averages 7-10 cm per year. As a result, flooding during the rainy season and tidal flooding become a threat to the metropolitan area.
The population density in the Jakarta, Bogor, Depok, Tangerang, and Bekasi (Jabodetabek) metropolitan area then also raises problems regarding housing availability. Data from the Ministry of Public Works and Public Housing indicated a backlog in home ownership of nine million units that the government must address.
Progress toward an equitable economy
The first phase of development of Nusantara, which focuses on the central government core area (KIPP), has been started. The development offers hope for economic growth in the area.
Economic growth in Nusantara and its surroundings in 2023 was recorded to be higher than the average economic growth in Indonesia of 5.05 percent (year-on-year), with Balikpapan clocking a growth of 6.5 percent; Samarinda, 8.6 percent; Kutai Kartanegara, 5.1 percent; and North Penajam Paser, which is the location of Nusantara, registering a 29.8 percent growth.
The wheels of the economy in the property sector for areas around Nusantara have also started to move, with the highest demand for standalone house property dominated by two cities, namely Balikpapan, 69.1 percent, and Samarinda, 48.1 percent. Meanwhile, for land property, the highest demand was recorded by Kutai Kartanegara, 76.5 percent, and North Penajam Paser, 86.2 percent.
These indicate that Nusantara's development has started to attract investors engaged in providing land for the new capital development projects whose activities are concentrated in the North Penajam Paser and Kutai Kartanegara areas.
Meanwhile, property in areas around Nusantara tends to be in demand among the new capital project workers looking for housing in cities closest to Nusantara. Apart from East Kalimantan, the new capital development also had an economic impact on regions in Eastern Indonesia.
At the Kaltim Kariangau Terminal (KKT) container terminal, there has been an increase in container flow related to the needs of Nusantara's development. Container flow in KKT grew by around 21 percent from 96 thousand TEUs in semester 1 of 2023 to 117 thousand TEUs in the corresponding period this year.
Visits by container ships and Ro-Ro ships as well as increased activities of dry bulk carriers loading crushed stone for Nusantara's construction projects at Parepare Port, South Sulawesi, have caused ship service performance to grow by around 6.01 percent, namely from 39,398 vessel calls to 41,766 vessel calls.
Furthermore, an increase was recorded in the number of vessels of the sea toll program for unloading cigarette commodities at Nunukan Port and an increase in demand for goods required in Nusantara projects as well as consumer goods such as clothing, food, and electronics in Samarinda. The same also occurred in the delivery of sand from West Sulawesi and the delivery of 70 tourism buses from East Java to the port of Balikpapan.
Shipping and delivery from several regions in Eastern Indonesia to meet the needs of construction materials and consumer goods for Nusantara's construction projects prove that economic equality in Eastern Indonesia has begun to improve and the performance of the sea toll program, as the main foundation for Indonesia to become a maritime country, has increased.
Nusantara's development also positively impacted the investment climate in East Kalimantan, with a 7.30 percent growth in foreign investment (year on year). Meanwhile, domestic investment grew positively at 4.99 percent (year on year).
The increase in investment in East Kalimantan is inseparable from the groundbreaking of projects, with a total investment of Rp56.8 trillion (around US$3.66 billion) involving 31 investors.
Big strategy
On August 17, 2024, for the first time ever, the commemoration of Indonesia's Independence Day anniversary was held in Nusantara.
Enthusiasm and awe radiated from the faces of the attendees at the Independence Day celebrations. There was a sense of pride that the Indonesian nation could build its own capital city.
The Independence Day celebrations in Nusantara are proof of the achievement of making Nusantara a symbol of national identity.
The new capital's development is a long-term program that cannot be carried out hurriedly.
Improvements in the dissemination of information and communication on Nusantara's development must be carried out by prioritizing the Penta helix strategy involving private public relations agencies, public relations of ministries and agencies, regional governments, as well as the mass media.
Nusantara's development is a big strategy for the Indonesian nation to build economic strength. Continuity in the development of Nusantara, which is the commitment of President-elect Prabowo Subianto to President Joko Widodo, is the first chapter of the Indonesian nation's journey to becoming a strong and advanced country as has been aspired all this time.
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Translator: Aji Cakti, Raka Adji
Editor: Azis Kurmala
Copyright © ANTARA 2024
