The Inaugural Independence Day Ceremony in Nusantara: A Milestone or a Setback?

August 17, 2024, marked Indonesia’s 79th Independence Day with a historic ceremony in Nusantara (IKN), the new capital. The event, led by outgoing President Joko Widodo (Jokowi), highlighted Nusantara's role in Indonesia’s future. A week earlier, the original Proclamation text and a replica of Indonesia’s first flag were ceremonially moved from the National Monument (Monas) to Nusantara.

Flag-raising ceremonies were also held at the Presidential Palace in Jakarta and at Nusantara. Incoming President Prabowo Subianto attended the Nusantara event, while Vice President Gibran Rakabuming Raka and outgoing Vice President Ma'ruf Amin presided over the Jakarta ceremony. 

The celebration was a pivotal political effort to affirm IKN as Indonesia’s new capital, was intended to show the move toward a more equitable future. However, the celebration was marred by polarizing views and oppositions.

IKN and the Puzzles

IKN, located on Borneo’s East Kalimantan province, includes Penajam Paser Utara and Kutai Kartanegara districts, and Sepaku and Loa Kulu subdistricts, with 11 rural villages and two urban villages. As a smart city, it will feature advanced technology such as the Internet of Things, a city data centre, autonomous driving, and urban air vehicles. It will focus on cybersecurity, carbon solutions and renewable energy use, and “green initiatives” aiming to become a “Kota Dunia untuk Semua” (a Global City for All), with a net-zero emissions target. 

IKN is a vast complex featuring 100-hectare presidential and vice-presidential palaces, a judiciary complex, a central bank complex, and a legislative complex.[1] 

Construction will be phased: 

• 2022- 2024: Build presidential palace, ministerial buildings, high-rise housing for civil servants, military personnel, police, and intelligence officers, and essential infrastructure.
• 2025-2029: Build universities, research centres, public transportation, and housing for the general public.
• 2030-2034:  Focus on railways and industrial clusters. 
• 2035- 2039: Enhance health, education, research, and socio-cultural activities and partnerships.

The plan includes connecting Balikpapan, a city located south of IKN known for its oil, gas, and logistics industries, and Samarinda, located north of IKN and renowned for its agriculture and nature tourism, via a highway and an immersed tunnel. While the Balikpapan-Samarinda highway is already operational, the tunnel, which costs IDR 3 to 4 trillion (USD 193.13 million to 257.52 million) per kilometer, is still in the planning stage. It is expected to be 1.5 km long and cover a total distance of 47 km[2].  Building the tunnel significantly more expensive than constructing the highway, and IKN still need to build 143.78 km of highways amounting to IDR 158.25 billion per kilometer.

The project faces criticisms due to the following:

1. Moving the capital city was supposedly inspired by the first Indonesian President Sukarno, however, it was abandoned the idea due to the high cost and unfavourable feasibility study to move the capital city to Kalimantan. Despite the green claims, environmentalists and experts have raised concerns that the development has damaged the mangrove ecosystem in Balikpapan Bay, threatened native wildlife, including orangutans, owa, and reptiles, and negatively impacted the biodiversity of Kalimantan’s forests.[3] 
2. If IKN intends to benefit the public and the state budget commitment is so substantial, why has the plan been kept secret? 
3. If IKN does not rely solely on the state budget, what political agreements support this agenda, considering East Kalimantan's prominence in oil palm plantations, coal, and oil and gas? 
4. If IKN is already in the government’s medium-term plan, why was it divisive in the 2024 election? 

The Secretive IKN plan

The idea to move the capital city from Jakarta to IKN was not made public until May 16, 2019, when the Ministry of State Planning (PPN/Bappenas) organized a national dialogue in Jakarta to present an assessment on the urgency of relocating the capital.[4] Moving the capital from Jakarta to IKN aims to reduce the socioeconomic gap between Java, the most populous and developed island, and the less-developed outer islands by the simultaneous development of special economic zones and industrial zones, particularly in six metropolitan cities on the outer islands: Medan (North Sumatra), Palembang (South Sumatra), Banjarmasin (South Kalimantan), Denpasar (Bali), Makassar (South Sulawesi), and Manado (North Sulawesi). 

The government soon declared IKN as included in the National Medium-Term Development Plan (RPJMN) 2020-2024. As a rule, any program is included in the RPJMN will be part of the five-year national programs regardless of who becomes president. President Jokowi announced on August 26, 2019,[5] that the expected budget for IKN is approximately IDR 466 trillion (USD 30.2 billion). Of this amount, 19% would come from the state budget, while the remainder would come from private investments, state-owned enterprise investments, and other public-private partnership schemes. 

The Ministry of State Planning have announced choosing East Kalimantan as the location for IKN since August 21, 2019.[6] The press release was ambiguous. The ministry stated that once the President made his final choice, they would conduct a further study to help prepare the masterplan and the urban design. On February 28, 2020, Minister Luhut Panjaitan, one of the most trusted minister of Jokowi, released a statement that three foreign consultant companies and prominent individuals would advised IKN development: McKinsey, Nikken Sekkei, and Aekom as corporations, and then the individuals would include the tech billionaire from Japan Masayoshi and Former UK Prime Minister Tony Blair.[7]  Only McKinsey, was later mentioned by the media as winning a bid of IDR 25 billion (USD 1.6 billion),[8] to conduct the three-month feasibility study. The public has no access on McKinsey’s feasibility study or its results.

The IKN law was expedited. It was carried out surreptitiously during the COVID-19 pandemic. The IKN initiative was released to the parliament on December 17, 2019 and the draft was finalized on January 15, 2020. On January 17, 2020, the plan to move the capital city and the plan to include it in the medium-term planning of the Republic was released under the Presidential Regulation No. 18/2020. Law No.3/2022 on IKN was adopted on February 15, 2022. The Otoritas IKN announced the first stages of development in August 2022, beginning with the market assessment of potential partners to build the various facilities[9]. Jokowi asked for a revision of the law to accelerate the development of IKN and the transition process to move the capital. A revised law on IKN, No. 21/2023, was adopted on October 31, 2023. The updated law strengthens the Otorita IKN and revise the process of procurement and the management of IKN properties. Throughout the process, there has been consistent opposition from political parties, experts, and civil society. Nonetheless, the IKN development continues.[10] The ground-breaking of IKN started on June 5, 2024. 

Potential Setbacks for IKN

IKN was described as urgent. Government officials frequently reference various examples of moving the capital city to another location such as Kazakhstan’s capital from Almaty to Astana, Brazil’s capital from Rio de Janeiro to Brasilia, and also Australia and the immersed tunnel from Geoje, Busan in South Korea, and Fehmarn in Europe, where such tunnels connect areas without changing the environmental morphology.[11]

The internal process of IK creates oppositions that may hinder its progress. First, the secrecy surrounding the feasibility study of developing IKN, the abrupt inclusion of IKN in the RPJMN, and the unusual passage of laws to secure IKN programs. 

According to Minister of National Planning, Bambang Brodjonegoro, the plan was intensively discussed three years before he became minister. It was kept confidential with the intention of waiting only after the 2019 election, which marked the start of Jokowi’s second term.[12] Although there were public discussions, it was focused on convincing people that IKN was an urgent solution to the issues faced by Jakarta as the capital city. The opposition was largely ignored. Legal think tank, PSHK noted that the IKN violates  the 1945 Constitution for two reasons: first, the powers granted to Otorita IKN in Articles 1 (points 8 and 9) exceed the authority of local government as defined in Article 18 of the Constitution, which outlines the mandate of local government in relation to local legislatures and authorities; second, IKN is given extensive powers that it can override any rules, as article 42 declares that any rules conflicting with IKN policies are deemed non-applicable.[13]

Jokowi’s record of rapidly approving infrastructure projects without proper feasibility studies is well-documented.[14] Jokowi’s emphasis on fast-tracking infrastructure development often results in projects that are not optimally utilized, sometimes leading to underuse, accumulating debts and incurring additional costs. 

Second, there is no guarantee of sustainable financing for IKN. The 2025 state budget allocated only IDR 143 billion (or USD 9.2 million). The Finance Minister stated that the budget allocation is a baseline, and may be adjusted by the incoming President. Prabowo mentioned that as a businessman, he is also an investor.[15] Former Minister of Investment Bahlil Lahadalia claimed that foreign investments are waiting for the completion of the first stage of infrastructure development contradicts his statement on December 23, 2023[16] confirming that foreign investment to IKN has reached IDR 50 trillion (USD 3.2 billion). 

Third, ethnic groups in East Kalimantan have complained about displacement without enough compensation. The communities of Balik Sepaku, Balik Pemaluan, Paser Maridan, Bakau Lemit, and Pemaluan Sepaku are among those affected. They also observed drones mapping their areas —their agricultural land, homes, and cemeteries were marked as “Land of Police Headquarters.[17] The government has stated that 2,086 hectares of IKN remain contested and uncleared because the people refused to relocate.[18] Further, the legal transition has been misused to destroy areas in IKN and the nearby areas in the form of illegal mining, such as soil, rocks, quartz sand. Over 3,700 hectares land were identified as affected per December 2023.[19]

What to expect?

IKN exemplifies arbitrariness and a disregard for the issues face by the people. Promoting sustainability means engaging public participation, rather than using propaganda to secure power. 

As the world awaits the inauguration of Prabowo as the 8th President of Indonesia on October 20, 2024, the civil society remains vigilant about Jokowi’s final days in office. Observers believe that Jokowi is a tactical leader constantly looking for his opportunity to advance. IKN proves that the civil society must actively safeguard the principles of democracy, clean government, and accountability.

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Dr. Dinna Prapto Raharja is an Associate Professor in International Relations at Binus University and the Founder of Synergy Policies. She holds Doctor of Philosophy and Master of Arts from the Department of Political Science, The Ohio State University, US with major in comparative politics and minor in international political economy. Her research interest includes: comparative politics of democracy, equity in social protection (healthcare and employment benefits), comparative human rights, regional political economic integration in ASEAN.

Disclaimer: This published work was prepared with the support of the Heinrich Böll Stiftung. The views and analysis contained in the work are those of the author and do not necessarily represent the views of the foundation. The author is responsible for any liability claims against copyright breaches of graphics, photograph, images, audio, and text used.