Rachel Mealey: Indonesia is about to reach a milestone: the first Independence Day ceremony in its new capital. But after two years of construction, the $45 billion megaproject is struggling with funding and is behind schedule. Some are wondering whether the country’s next president will see the project through. Here’s Indonesia correspondent Bill Birtles.
Bill Birtles: The new centre of Indonesian power, or at least that is the hope of outgoing President Joko Widodo. This week he travelled to the island of Borneo for the first time with his entire cabinet to meet at the site of the new capital Nusantara. On Saturday he will lead a ceremony there to mark Indonesia’s national holiday, which the head of state traditionally does in the presidential palace in Jakarta.
Joko Widodo: One of the reasons for moving the capital is our desire for equitable development. 58% of Indonesia’s economic activity takes place on the island of Java and we need to ensure that other areas outside Java also participate in this economic development.
Bill Birtles: Taking the capital out of overcrowded Jakarta, which has poor infrastructure, is an idea that has been around for decades. Joko Widodo wants to go down in history as the president who actually implemented this idea. So far, there is an almost finished presidential palace and some other buildings, but it is still a construction site. President Widodo praises the progress.
Joko Widodo: Investments to date have reached $5.4 billion and we have started 55 projects including education, healthcare, retail, hotels, offices and banks.
Bill Birtles: But hopes for foreign investment are fading. Efforts to get major players from China, Singapore, the Middle East and other countries to finance the new city have so far been unsuccessful. Political analyst Agus Pambagio believes the project could run out of money.
Agus Pambagio: This is not a way to build infrastructure like the capital with the help of foreign investment. Nobody is investing the money there. So the investor will come when the infrastructure is, let’s say, 80% or 90% ready. That means that if you build on a greenfield site, you have to start with your own money from our state budget.
Bill Birtles: Is this investment project a sensible use of Indonesian government funds?
Agus Pambagio: No, we don’t have that much money.
Bill Birtles: Whatever happens, President Joko Widodo will not be able to decide. His successor, Prabowo Subianto, will be sworn in as Indonesia’s new head of state in October and he too was at the construction site of the new capital this week. He says he will at least continue the project and, if possible, finish it.
Rachel Mealey: This is Bill Birtles, reporting from the current Indonesian capital, Jakarta.
