Indonesian Governance

The development of the National Capital City (IKN) in East Kalimantan is viewed as a strategy to promote economic development outside of Java Island.

From an economic perspective, the relocation of the capital is expected to create new job opportunities, stimulate certain sectors, and attract investments, ultimately increasing both regional and national economic growth. On the other hand, the government hopes that IKN will reduce dependency on Jakarta as the center of economic and administrative activities, as well as create a more modern and well-managed area. However, this project faces significant challenges in terms of financing and the effective distribution of the budget. There are also concerns about the very high construction costs and potential uncertainties in budget management, which could affect long-term economic stability. In terms of governance, IKN is seen as a step towards optimizing a more decentralized government, facilitating coordination between institutions, and improving the management of natural resources and the environment in the region. Nonetheless, there are challenges related to infrastructure readiness and regulatory support that must be ensured so that this project can proceed effectively without disrupting the existing governance system.