Prabowo Subianto shifts focus to welfare as Nusantara struggles with funding and momentum

Indonesia’s ambitious new capital Nusantara, envisioned as a modern replacement for Jakarta, now risks stagnation. With budget cuts, political hesitation, and slow progress, questions mount about whether the city can fulfill its promise.

A Vision Stalled

Nusantara, formally known as Ibu Kota Nusantara (IKN), was revived by former president Joko Widodo as his legacy project to address Jakarta’s overcrowding and subsidence. The city was supposed to be inaugurated on August 17, 2024, but remains far from complete. Despite its striking Garuda-inspired presidential palace and new infrastructure, much of the city sits unfinished and quiet.

Budget Cuts and Shifting Priorities

President Prabowo Subianto has taken a different path, slashing funds allocated to Nusantara. The budget dropped from 43.4 trillion rupiah (about SGD 3.47 billion) in 2024 to a projected 6.3 trillion rupiah (about SGD 504 million) in 2026—far below the 21 trillion requested by the city authority. Prabowo has instead emphasized social programs, including free meals for children and pregnant women, leaving Nusantara’s future uncertain.

Limited Progress on the Ground

So far, only 800 hectares of the planned 6,600-hectare core government zone have been developed. About 1,000 city employees and several hundred ministry staff reside there, supported by new hospitals, coffee shops, and a toll road linking to Balikpapan. However, key projects like malls and cinemas remain unbuilt, and foreign investment from Middle Eastern and Asian allies has not materialized.

Optimism Amid Doubt

City authority head Basuki Hadimuljono insists that the executive area housing the palace and ministries is “97–98 percent complete.” He believes President Prabowo will relocate government functions by 2028, once legislative and judicial areas are ready. Yet, without a signed presidential decree, relocation remains stalled. Some civil servants express reluctance to move, while others, like employee Helena, praise the comfort of new facilities.

Businesses and Citizens Struggle

Local entrepreneurs who once thrived during Jokowi’s construction push now face declining sales. Snack vendor Abduh Rajab reported a 60 percent drop in income due to fewer workers and visitors. Meanwhile, tourists like Ronald Telaumbanua still flock to the Garuda-shaped palace for photos, offering a glimpse of the city’s symbolic allure.

Risk of Becoming a White Elephant

Analysts warn that Nusantara risks slipping into “white elephant” territory without renewed momentum. Dedi Dinarto of Global Counsel observed that political will has waned, with Prabowo prioritizing welfare over the capital move. The uncertain pace raises concerns across the region, as Nusantara was envisioned to become a new hub of governance and economic influence.

Nusantara’s fate remains tied to political will, funding, and long-term vision. For Indonesians, the project symbolizes both national ambition and political compromise. For Singaporeans and others in Southeast Asia, the success—or failure—of Nusantara will shape regional investment, mobility, and economic opportunities in the years ahead.

Sources: Straits Times (2025) , The Malaysian Reserve (2025)

Keywords: Indonesia Capital, Nusantara Project, Prabowo Subianto, Jokowi Legacy, Jakarta Relocation, Budget Cuts