The IKN Authority continues its search for investors for the development of the new Indonesian capital. President Jokowi stated that the IKN project is not simply a matter of physically relocating the capital city.
JAKARTA, KOMPAS – A day after meeting with Singaporean Prime Minister Lee Hsien Loong, President Joko “Jokowi” Widodo paid a working visit to Tabalong regency, South Kalimantan, on Friday (17/3/2023).
During his visit, Jokowi stated that the development of the Nusantara capital (IKN) in East Kalimantan does not simply mean physically relocating the country’s capital city. The IKN project is also aimed at building new ways of working and changing mindsets to boost Indonesia’s competitiveness with other countries.
Previously, during a meeting with President Jokowi on Thursday (16/3) in Singapore, Prime Minister Lee voiced his support for Jokowi’s vision for the new capital to be a smart and green city. Apart from that, Singapore’s private sector also conveyed interest in supporting the IKN project (Kompas, 17/3).
The IKN Authority immediately followed up on the interest of potential investors, especially those from Singapore, to participate in constructing Indonesia’s new capital.
Of the 167 companies that sent a letter of intent (LoI), around 20 companies were deemed potential investors as a result of President Jokowi’s meeting with Prime Minister Lee.
The IKN Authority’s funding and investment deputy, Agung Wicaksono, said on Friday (17/3) that half of the companies that expressed interest were Indonesian companies. The remaining consisted of foreign parties, most of which were from Singapore.
Apart from Jokowi’s lobbying, Agung continued, the IKN Authority also maintained communication with potential investors from other countries. For one, IKN Authority head Bambang Susantono met with South Korean Land, Infrastructure and Transportation Minister Won Hee-ryong and South Korean businesses.
In his meeting with Bambang, Minister Won stated that the South Korean government is willing to support the development of Nusantara as a smart city. South Korea is also willing to collaborate with the IKN Authority to ensure the new capital is developed with advanced technology. Won’s entourage included several executives, including Samsung C&T executive vice president and Hyundari senior vice president.
Last week, IKN Authority deputy head Dhony Rahajoe also met with around 100 businesses that are members of the Japanese Business Federation (Keidanren) in Japan. As a result of this meeting, several Japanese companies will be visiting the new capital at the end of March.
Thus far, there appears to be the same number of potential investors from the United States and China. Investment potential from the United Arab Emirates (UAE) was also immediately followed up. In this regard, the IKN Authority is cooperating with the Indonesia Investment Authority (INA), the country’s sovereign wealth fund.
According to Agung, interest from potential investors from various countries aligns with the expectation that Nusantara will become a city for everyone.
These investments are important as it will finance 80 percent of the development of IKN.
“All potential investments are being evaluated. These investments are important as it will finance 80 percent of the development of IKN,” said Agung.
Hence, as a total of Rp 480 trillion (US$30 billion) is required to develop the new capital, an investment of around Rp 370 trillion ($24 billion) is needed.
Businesses’ interests in investing in the IKN project increased after the enactment of Government Regulation (PP) No. 12/2023 concerning business licensing issuance, ease of doing business and investment facilities for businesses in Nusantara in early March. Prior to this regulation, there were only 120 letters of intent (LOIs).
New way of working
During his speech at the Rabithah Malay-Banjar prayers in Tabalong regency, President Jokowi expressed his gratitude to the Malay-Banjar community for their continued support for the construction of the IKN project, which kicked off in August last year.
“We want to develop new ways of working, and how the government serves the community. Working and serving well in an efficient manner. And secondly, we also want to change our mindset so that we can compete with other countries,” said Jokowi.
According to data from the Public Works and Housing Ministry, the construction of the first phase of the IKN project, which began in August 2022, is targeted for completion in 2024. This includes preparing the land for the main area of phase I of the government center. This area will consist of the state palace, ministry buildings and ministerial houses. Other infrastructure includes the construction of the IKN toll road and the west side of Jalan Sumbu Kebangsaan.
Other developments include the Sepaku Ring Road segments 2 and 4, construction workers' housing, the intake and transmission pipelines of the Sepaku River, the provision of raw water for the Mentawir nursery and the Sepaku Semoi Dam.
“Once more, competition between countries is not easy. If we do not come up with new ways of working, if we don’t adopt new mindsets in competing, then we will lose. We will remain as a developing country,” said Jokowi.
President Jokowi cited the fact that many countries in Latin America, or even Asia, have remained as developing countries for more than 70 years. “[This is] because they don’t have the courage to change, changing human resources through new ways of working. Working hard to change this mindset is a must so that young people will want to change. We want to work hard so that we can compete,” said Jokowi.