An executive with East Ventures, an international venture capital firm, says that the conclusion of the 2024 Indonesian general elections has influenced foreign investors’ confidence in Indonesia, with many of them being increasingly enthusiastic about the development of the Nusantara Capital City (IKN).
Indonesia is in a strategic position to attract investment, especially as the polarization between the United States, China, and India has yet to subside.
“With the emergence of the Nusantara Capital City, investors are paying attention to this new city as a target for new technological innovations,” Roderick Purwana, Managing Partner of East Ventures, said during a gathering with the media on Thursday, April 24, 2024.
He emphasized that the Nusantara Capital City, as a new city, requires solutions tailored to its needs, especially as it will focus on environmental sustainability and green initiatives.
“Solutions related to climate tech will be one of the innovations,” Roderick said.
However, he also said that Jakarta would remain an investment magnet, expressing optimism that investments will continue to flow into Indonesia’s economic hub with the government’s support.
“Despite innovations in the Nusantara Capital City, we see various opportunities for the expansion of companies based in Jakarta and its surroundings,” he said.
Earlier, Minister of Finance Sri Mulyani Indrawati said that the realization of funds for the IKN project from the beginning of the year until March 2024 reached Rp4.3 trillion (US$ 264.8 million). This represents approximately 10.9 percent of the 2024 state budget (APBN).
The government has allocated Rp39.6 trillion for the development of the Nusantara Capital City from this year’s state budget, making it the largest allocation since the project became law in 2022.
“In 2022, only Rp5.5 trillion was realized, and in 2023, it was Rp27 trillion. This year, the budget allocation is Rp39.6 trillion,” Sri Mulyani told a press conference in Jakarta on Friday, April 26, 2024.
The budget for 2024 includes Rp2.3 trillion for infrastructure development, including the presidential palace, ministry areas, and the Nusantara Capital City Authority building.
These funds are also allocated for the construction of government employee apartments, defense and security projects, ministerial residences, toll roads, roads and bridges, airports, and hospitals.
Infrastructure development also includes the arrangement and improvement of the Sepaku Semoi Dam area, the construction of the Core Government Center (KIPP) reservoir, and flood control measures for the Nusantara Capital City.
