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The underwhelming development of new Indonesian national capital city, Nusantara has strained the alliance between President Joko “Jokowi” Widodo and his successor, Prabowo Subianto. We look at how this could drive tensions for the next government in the coming years.
- Without the facilities and infrastructure for officials and bureaucrats to run the national government from Nusantara, it is likely that Jakarta will remain the de facto capital for years.
- Without more investment, especially from foreign sources, Nusantara’s development will be slow after Jokowi’s tenure ends in October. President-elect Prabowo Subianto has not shown enthusiasm in attracting investment for the project.
- This divergence on how to develop the new capital will sow discord within the Jokowi-Prabowo alliance, with Jokowi losing much of his current bargaining power once he leaves office.
- Attempts to compensate for the loose ends of this alliance, including political appointments and synergies in the November local elections, will continue to emerge amid concerns about Prabowo’s health.
Rain on his parade
In the past month it has become increasingly doubtful that Jokowi would be able to unveil the crowning glory of his time in office, the new Indonesian capital of Nusantara, before he steps down. The president and his loyalists had at first appeared unfazed when the Nusantara development’s chief and deputy chief, pressured by unrealistic, politicised goals amid a lack of funds and ignorance of on-the-ground challenges, resigned in May. His ministers had criticised the resigning technocrats and promised the capital would be ready in time. But now, Jokowi has acknowledged that basic facilities, especially decent plumbing and housing for the first batch of civil servants, are not ready for the capital’s relocation.
On 16 July, Jokowi admitted that Nusantara would only be 15% complete by 17 August. This was the scheduled date of the new capital’s inauguration and Indonesia’s Independence Day, when the president traditionally leads a high-profile flag ceremony with thousands attending. This does not only show how slow development has been, it also means that Jokowi will not be able to fulfil his last wish as president: running the country from Nusantara. Jokowi had wanted to showcase Nusantara to the world with a lavish parade there on 17 August but now he has had to accept a smaller, simpler ceremony.
Jokowi has blamed the rainy season for the delayed development of government buildings, but the real reason is a lack of funds, and he has admitted there is a need for private investment. So far, Nusantara has only been built using the state budget. Under the watchful eye of the finance ministry, only a few buildings could be constructed at a slow pace. While Jokowi’s presidential office has had its façade completed, it was clear that he could not use it in July as planned.
Show me the money
No foreign investor money has been put into Nusantara and the few local investors have put in symbolic investments to get government backing for projects elsewhere. This situation is unlikely to change until Jokowi’s successor, current Defence Minister Prabowo Subianto, demonstrates a strong commitment to accelerating Nusantara’s development. While he has not opposed the project or categorically declared that he would shelve it, he has also not marketed Nusantara to investors, not even when attending business forums as president-elect. Local mainstream and social media outlets have speculated that Prabowo has no intention of completing the development or moving to Nusantara during his tenure that ends in 2029. In fact, Prabowo has shown more interest in other big-ticket projects, like a free meal programme for school children and building the Jakarta sea wall, both of which would reduce outlays for Nusantara. Prabowo has also not committed to a convincing budget for Jokowi’s dream city, so far.
Nusantara’s underwhelming development has clearly sown discord between Jokowi and Prabowo, two former foes who collaborated for the 2024 elections with Jokowi’s son Gibran Rakabuming as Prabowo’s running mate. This has led to talks of an alliance fissure even before the October leadership transition, which was due to take place in Nusantara. The power handover will now have to be done in Jakarta (even though it has already been stripped of its capital city status), but after that it is very unlikely that Prabowo will run the country from a base that is far from operational. The compromise will likely be Gibran sitting in Nusantara to monitor its progress, with Prabowo in Jakarta. Such a scenario became more credible after septuagenarian Prabowo had to undergo major leg surgery in June, raising doubts he could lead from Nusantara, which would not have decent hospitals for years.
Family affair
The Prabowo and Jokowi camps have tried to downplay speculation of a rift with appointments designed to show that their alliance is still intact. Jokowi on 18 July appointed Prabowo’s nephew Thomas Djiwandono as deputy finance minister – a position traditionally given to technocrats, academics or those with long experience in the civil service. While US-educated Djiwandono has a background in economics and is the son of a former central bank governor, he is better known for his work in the Prabowo family business and as treasurer of Prabowo’s Great Indonesia Movement Party (Gerindra). Beyond showing a cohesive alliance, the appointment signals dynastic politics from the Jokowi and Prabowo families will be a feature of the next government – cementing the notion of Indonesia returning to the oligarchic ways of the past.
More politicised appointments will be seen in the coming months, including the nomination of candidates for the November local elections, in which more than 500 regional positions are up for grabs. In many regions, the coalition of parties behind the Jokowi-Prabowo alliance will nominate those with familial relationships to the two power brokers, even if such choices could result in missed opportunities. Within the coalition, negotiation over candidates is still very much geared towards balancing the interests of the two men and the parties that supported their alliance, particularly for positions in the key Jakarta, West Java and Central Java provinces.
For businesses and investors, it is important to monitor the health of the alliance in the coming months and years, especially after Jokowi steps down in October. Without an official powerful title, Jokowi’s influence will gradually decline, even if he stays popular. Prabowo will then have more space to dictate policymaking, including the future of Nusantara. The gradual incline of Prabowo’s power will only plateau or reverse if his health deteriorates, offering Gibran, who is half Prabowo’s age, a chance to step up. The scenario of rising Gibran presents higher political risks. Many political players are not yet convinced of the 36-year-old’s capacity, strength or even his eligibility to lead the world’s fourth most populous country. Gibran could only run with Prabowo in the February elections after his uncle, who was the chief of the Constitutional Court, influenced other judges in 2023. They controversially changed the age threshold of 40 in the presidential election laws to accommodate under-age candidates, like his nephew.
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