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Indonesia builds Nusantara as a second capital

Indonesia builds Nusantara as a second capital

Built World

From Jokowi's full Jakarta replacement to Prabowo's scaled-back political capital

May 12th, 2026: Constitutional Court upholds IKN Law, reaffirms Jakarta as capital

Overview

Indonesia's Constitutional Court ruled on May 12 that Jakarta stays the official capital until President Prabowo Subianto signs a presidential decree — a Keppres — formally transferring the seat of government to Nusantara. The court rejected a petition arguing that the 2022 IKN Law and the 2024 Jakarta Special Region Law created conflicting legal statuses for Jakarta. Prabowo has not yet issued the decree.

Construction of the legislative and judicial complexes, started in December 2025, continues toward a 2027 completion target. The 2026 state budget for Nusantara has been cut to Rp6.26 trillion, less than half the Rp13 trillion approved in 2025, as Prabowo directs more spending toward food security, defense and free school meals. About 2,000 civil servants are now working at the site; the government wants 4,000 there by year-end.

Why it matters

Indonesia is spending tens of billions to relocate the seat of government — but Jakarta keeps the economy, raising the odds Nusantara ends up half-empty.

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Key Indicators

$35B
Total estimated cost
Original five-phase budget through 2045, mostly to be raised from private investors who have largely stayed away.
Rp20T
Legislative + judicial contracts
Eight multi-year construction packages signed in early December 2025, covering 2025–2027.
147,320
Nusantara population, end 2025
Mostly residents of pre-existing villages such as Sepaku, Bumi Harapan and Pemaluan, not relocated civil servants.
2028
Target political capital launch
Year executive, legislative and judicial branches are planned to fully operate from Nusantara.
0%
Foreign private investment secured
All Rp65.3 trillion in private commitments to date come from Indonesian firms and state-owned entities.

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People Involved

Organizations Involved

Timeline

April 2019 May 2026

11 events Latest: May 12th, 2026 · 1 month ago Showing 8 of 11
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  1. Prabowo's first overnight stay

    Political

    Prabowo sleeps at Nusantara for the first time and reaffirms the $32 billion project, addressing months of investor doubt.

  2. Vice Presidential Palace completed

    Milestone

    Gibran's office begins phased relocation to Nusantara, the first senior executive office to move.

  3. Groundbreaking on legislative and judicial complexes

    Construction

    Crews break ground on the parliament, Supreme Court, Constitutional Court, Judicial Commission and a Plaza of Democracy designed for public assembly. Total contract value: about Rp20 trillion through 2027.

  4. Final Phase II contracts signed

    Construction

    OIKN signs the last eight of 20 contract packages, covering 16 legislative buildings on 41.81 hectares and four judicial buildings on 15.15 hectares.

  5. Phase II budget unblocked

    Funding

    Government clears Rp48.8 trillion for 2025–2029 Phase II works, well below Jokowi-era spending.

  6. Prabowo takes office

    Political

    Prabowo Subianto and Vice President Gibran Rakabuming Raka are sworn in, inheriting Nusantara as Jokowi's flagship project.

  7. Independence Day ceremony at Nusantara

    Milestone

    Jokowi holds Indonesia's national day flag ceremony at the unfinished State Palace, marking partial first-phase completion.

  8. Jokowi announces capital move

    Announcement

    President Joko Widodo tells the nation he will relocate the capital from Jakarta, citing congestion, flooding and land subsidence.

Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

1999

Putrajaya, Malaysia (1999)

Malaysia opened Putrajaya as a planned administrative capital 25 km south of Kuala Lumpur, moving the prime minister's office and most ministries there. Parliament and the central bank stayed in Kuala Lumpur, and many civil servants resisted relocating their families.

Then

Government functions split between two cities, with Putrajaya housing the executive while Kuala Lumpur kept legislature and finance.

Now

Malaysia today runs a stable two-capital model, but Putrajaya's population growth lagged plans for years and the city is still seen as quiet outside business hours.

Why this matters now

Putrajaya is the closest living model for Indonesia's new two-capital design — political functions in one city, economic life left in the old capital — and shows both that the model can work and that the new capital tends to feel hollow for a long time.

November 2005

Naypyidaw, Myanmar (2005)

Myanmar's military junta moved the capital from Yangon to Naypyidaw with almost no warning, ordering ministries to relocate within days. The new city was built in remote central Myanmar with twenty-lane boulevards and sprawling government complexes.

Then

Government operations transferred by 2006, but the city remained largely empty of residents and visitors.

Now

Two decades later Naypyidaw is widely cited as the textbook 'ghost capital' — functional on paper, but lacking the dense civic life that makes a capital city work.

Why this matters now

Naypyidaw is the cautionary case Nusantara skeptics most often cite: a state-built capital can be physically completed and still fail to attract a real urban population, especially without strong private-sector pull.

April 1960

Brasília, Brazil (1960)

Brazil inaugurated Brasília as a brand-new capital on the empty central plateau, designed by Lúcio Costa and Oscar Niemeyer. The move shifted the federal government from coastal Rio de Janeiro to a planned modernist city built in under four years.

Then

The federal government and diplomatic corps relocated, but officials continued to commute to Rio for years and the construction left Brazil with significant debt.

Now

Brasília succeeded as a political capital and now has more than 3 million residents, though it never absorbed Rio's economic role and developed sharp inequality between the planned core and informal satellite towns.

Why this matters now

Brasília shows the most ambitious version of the Nusantara playbook can endure — but also that a new capital tends to leave the old city's economic dominance intact for generations and produce its own unequal geography.

Sources

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