Heaptalk, Jakarta — As the Nusantara Capital (IKN) development in Kalimantan progresses, President Jokowi expressed his optimism that IKN will become a new economic growth hub during his recent statement in Kalimantan.
He voiced that the presence of Nusantara Capital will also boost the demand for agricultural products such as rice, vegetables, and onions, which can be immediately supplied from the surplus produced in the surrounding areas. For example, Jokowi mentioned that if an excess production of onions is currently being sold at a profitable price, it can be easily transferred to meet the needs of the new capital. He said, “There is an excess production of vegetables here that can be transferred to IKN, and earlier, red onions priced at a very good Rp30,000 (per kg) can also be transferred to IKN.”
Furthermore, the President emphasized Nusantara Capital’s strategic role in driving a new wave of economic growth centered on sustainability principles. “I believe IKN will become a new economic growth hub, and we also want an economic transformation, especially related to the green economy,” said Jokowi.
The development of IKN, including toll road infrastructure and the presidential palace, is being accelerated. The Indonesian government has allocated Rp40 trillion in the 2024 State Budget to build the infrastructure of Nusantara Capital. However, thus far, only Rp5.5 trillion has been utilized.
The Secretary-General of the Ministry of Public Works and Public Housing (PUPR), Mohammad Zainal Fatah, stated that budget absorption is minimal since infrastructure projects in IKN are progressing gradually and require time. He explained that budget absorption cannot be immediately maximized for various newly contracted projects as it could lead to issues.
“For example, for newly contracted projects, it’s impossible for the absorption to be significant immediately. Maybe later, as there is progress, it will follow. If the funds are withdrawn before anything is done, it will cause problems,” said Zainal.
Meanwhile, he guaranteed that the budget realization was high for long-contracted projects. One such project is IKN Batch 1, implemented from 2020 to March 2023. “The project comprises 40 packages with a total contracted ceiling or physical work value reaching Rp24.8 trillion. The construction includes the Presidential Palace and ceremonial grounds, the National Axis Phase I, and the Sepaku Semoi Dam,” concluded Zainal.
