Anya Chung, Research Analyst
Taiwan ASEAN Studies Center, CIER
In response to the escalating challenges of land subsidence and traffic congestion in Jakarta, Indonesian President Joko Widodo approved the relocation of the capital in April 2019. The new capital, named Nusantara, will be located in East Kalimantan on Borneo Island, selected for its strategic advantages, including a central location, proximity to key cities like Balikpapan and Samarinda, and a low risk of conflict. The region also offers ample land for development, robust infrastructure, and a safe environment free from natural disasters. The construction of Nusantara is planned in three phases, with the first focusing on the development of essential infrastructure and the relocation of government offices. The project involves collaboration between various Indonesian ministries and international advisors.
Nusantara is envisioned as a green, smart city, with 75% of the land allocated for green spaces and the entire city powered by renewable energy. The city’s design promotes efficient governance, economic growth, and job creation. Economic development in East Kalimantan will target key sectors such as mining, manufacturing, and agriculture, with the new capital divided into nine specialized development zones focused on industries such as healthcare, tourism, education, and technology. To attract both domestic and foreign investment, the government has introduced incentives such as tax exemptions and long-term land use rights. While domestic investment has been significant, foreign investment, particularly through public-private partnerships (PPPs), remains limited.
Taiwanese companies, particularly those in construction, ICT integration, and smart city solutions, are well-positioned to contribute to the project through joint ventures and strategic partnerships. Taiwan’s expertise in ICT and sustainable solutions offers substantial potential to support the development of Nusantara’s infrastructure. As the relocation progresses, Taiwan can leverage these opportunities to strengthen bilateral relations, fostering greater investment cooperation through business delegations and involvement in key infrastructure projects.
Comments