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Indonesia’s first planned independence day celebration at its multibillion-dollar new capital has resulted in an embarrassing climbdown for the government, after it was forced to scale back plans and withdraw invitations to foreign dignitaries.
The country was set to hold a grand ceremony on Saturday in Nusantara, the new capital being carved out of the jungle in Borneo with an estimated cost of $30bn, with thousands of officials in attendance.
But the ambitious project — a legacy hallmark for outgoing President Joko Widodo — has been beset by delays, forcing the government to cut back its guest list from 8,000 to 1,300 just days before the August 17 festivities.
The diminished ceremony underscores the setbacks to the project in the final months of Widodo’s presidency, and raises fresh doubts over its fate as he prepares to hand over leadership of south-east Asia’s biggest economy to his successor Prabowo Subianto in October.
Nusantara’s development has been marred by construction delays, land acquisition problems and the absence of much-touted foreign investors. Concerns deepened after the unexpected resignation of the project’s top management in June.
Widodo — who is popularly known as Jokowi — said the guest list had to be reduced as Nusantara did not have adequate facilities. “The accommodation was not enough, as well as food, since the ecosystem has yet to be built here,” the president said this week at a groundbreaking ceremony for a convention centre at the new capital.
Indonesia will now hold two independence day ceremonies: one in Nusantara, led by Widodo and Prabowo, and another in Jakarta, with the current and incoming vice-presidents.
Foreign diplomats were told they were no longer invited to Nusantara 10 days before the ceremony, and were asked instead to attend celebrations at the presidential palace in Jakarta, according to a letter sent by the foreign ministry seen by the Financial Times.
“The previous arrangements made for the ceremony to be attended by heads of missions in the capital city of Nusantara are no longer in place,” the ministry said in the letter, dated August 6.
Widodo first announced plans in 2022 to relocate Indonesia’s capital to Nusantara from heavily congested Jakarta, which is the world’s fastest-sinking city as well as one of its most polluted.
By moving the capital to an under-developed part of Indonesia, Widodo also aimed to spread wealth across the archipelagic nation.
But critics say the project has been rushed and the government failed to do sufficient research on the remote location, more than 1,200km away from the current capital. The site has struggled to reliably supply drinking water and electricity, while an airport, which was meant to be ready by independence day, remains unfinished, leaving the closest airport two hours away.
Widodo has said government operations will move in phases to Nusantara, which is targeted to be fully completed by 2045. Thousands of civil servants are set to begin relocating from September, but enthusiasm is low. One official told the FT they do not want to move, citing the lack of infrastructure and high costs of travel back to Jakarta.
But Widodo has been rushing to put the project on a stronger footing before he steps down this year, following a decade-long tenure in which he sought to transform Indonesia’s economy.
To dispel concerns after the resignation of Nusantara’s management, Widodo spent one night at the newly built presidential palace and held cabinet meetings at the capital.
Funding has also fallen short of expectations. Widodo has targeted 80 per cent private sector funding, but little has materialised despite offers of tax breaks and extended land rights. The Indonesian government is on track to have spent Rp72.3tn ($4.6bn) from the state budget on Nusantara from 2022 to the end of 2024.
Despite assurances from Prabowo that he will continue to build Nusantara, economists have warned that his administration will have to prioritise spending among multiple ambitious projects because of already strained public finances.
The FT reported last month that Prabowo’s team was considering cutting Nusantara’s budget to help finance his cornerstone campaign pledge of providing free meals to schoolchildren and pregnant women nationwide — a programme estimated by his aides to cost $28bn.
“At the very least, I will continue and, if possible, help complete it, even though developing a capital city is not a short-term job, it is a lengthy and difficult one,” Prabowo said this week.
Kennedy Muslim, a political analyst at Indikator Politik Indonesia, said Nusantara’s future would depend on Widodo’s leverage over the next administration.
“Jokowi is racing against time before he steps down . . . to ensure the development of Nusantara,” he said. “The big question remains how Jokowi can maintain political influence.”
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