Indonesia’s new capital: mapping a development boom

Indonesia is building a new capital on Borneo’s east coast. The construction of Nusantara aims to spearhead development in the archipelago nation’s less developed Kalimantan provinces and relocate the administrative apparatus from the congested megacity of Jakarta. The first civil servants will have moved by the end of this year, four years after the project’s inception.

To visualize the scope of this project, we’ve tapped our granular, sub-regional data to examine investment across Kalimantan.

Nusantara is being built adjacent to Balikpapan, an oil-industry hub that is already Kalimantan’s most economically important city; to capture the investment boom, Balikpapan’s figures are the ones to watch.

As our graphic shows, Balikpapan’s most recent 12-month domestic realized investment figure (that is, spending that has been implemented, not just planned or approved) surpassed IDR 7 trillion (the equivalent of about USD 412 million). That’s more than three times the level for second-place Samarinda, also in East Kalimantan. Investment for both cities dwarfs the major settlements for North, West and South Kalimantan respectively (Tarakan, Pontianak and Banjarbaru), which we’ve also labeled on our map.

We’ve also added West Java, which includes Jakarta, to give a relative sense of this spending versus Indonesia’s traditional economic engine.

We’ve specified domestic investment in our map because foreign investment on Kalimantan trails behind Java and Sumatra (Sumatera) so far. Our second chart combines the two streams to compare the major islands (again, on a realized investment basis). The economy of Sumatera, the nation’s biggest island region by area, benefits from its proximity to major shipping lanes.

We conclude with two more map views of domestic and foreign investment by province. As we have written before, Central Sulawesi’s nickel processing-driven boom stands out in FDI terms; North Maluku has also seen an influx of nickel-driven overseas investment.

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