Webinar on “Governance Challenges and Opportunities for Indonesia’s New Capital Nusantara”

In this webinar, Dr Diani Sadiawati and Mr Yance Arizona shared their opinions on the various governmental and regulatory challenges in implementing Indonesia’s New Capital Nusantara.


Tuesday, 8 March 2022 – ISEAS –Yusof Ishak Institute invited Dr Diani Sadiawati (Chairman of the Institutional and Regulatory Working Group – Strategic Coordination Team for the Preparation of the State Capital City Relocation Plan) and Mr Yance Arizona (Lecturer at the Department of Constitutional Law, Gadjah Mada University) to speak in a webinar, titled “Governance Challenges and Opportunities for Indonesia’s New Capital Nusantara”. Moderated by Dr Yanuar Nugroho (Visiting Fellow, ISEAS – Yusof Ishak Institute), Dr Diani Sadiawati elaborated on the legislative details of the newly enacted Nusantara State Capital City Law while Mr Yance Arizona discussed key issues with the implementation of this new state law as well as the capital city’s subsequent relocation to East Kalimantan.

Dr Diani Sadiawati and Dr Yance Arizona shared their observations on the newly implemented state law for New Capital City Nusantara. They discussed key issues with the capital city’s relocation to East Kalimantan. Dr Yanuar Nugroho moderated the session. (Credit: ISEAS – Yusof Ishak Institute)
Dr Diani Sadiawati discussed the details of the relocation plan for the Indonesian capital city and shared greater insights on the subsequent stages after enacting the State Capital City Law. (Credit: ISEAS – Yusof Ishak Institute)

Dr Diani Sadiawati first began her presentation by introducing the general demography and governmental structure for Indonesia’s new capital city, Nusantara. She proceeded to elaborate on the establishment of the Nusantara Capital City Authority, which would be in charge of the city’s preparation, construction, and subsequent relocation. Being a special regional government, this Authority possesses the right to adopt its own regulations, including having special authority to grant investment licenses to facilitate businesses and build special facilities to support the preparation. A Masterplan was also developed in line with the enactment of the State Capital City Law, which would serve as a guideline for implementing the new capital. Dr Sadiawati also provided some insights on the proposed timeline for this project, highlighting that much of its initial stages would focus on budgeting and setting up the Nusantara Capital City Authority. It was projected to be completed by 2045, with this project being identified as a national priority programme for a minimum of ten years in the government’s work plan. Dr Sadiawati then touched base on land acquisition, emphasizing that it will be carried out through appropriate channels following established laws and regulations. As such, she reiterated that all implementations of this project would be carried out to protect both individual and communal rights of indigenous people and ensure that environmental protection and disaster management would be maintained throughout the relocation process.

Mr Yance Arizona shared his findings on the legislative issues concerning the relocation of the Indonesian capital to East Kalimantan. (Credit: ISEAS – Yusof Ishak Institute)

Mr Yance Arizona began his presentation by illustrating some of his key discussion topics, one of which focused on fast-track legislation of the State Capital City Law. While the constitution does not prohibit fast track legislation, Mr Arizona believed that rushing the enactment of this law could bring about issues such as the lack of transparency, public participation, and clarity in the provision of the law. Apart from that, Mr Arizona discussed the ambiguity of the Nusantara Capital City’s status, questioning whether it should be part of the regional government or the central government. He also drew references to the point that Nusantara would be identified as a special regional government unit (which equates to being a province in Indonesia) and pointed out that this legal status might not be in accordance with the 1945 Constitution. Therefore, he suggested that the newly appointed Chief for Nusantara would have to resolve these key administrative issues to avoid further confusion.

Moreover, Mr Arizona highlighted the need to consider the interests of multiple parties in the capital city’s relocation to East Kalimantan. This included the economic activities that are still currently operational within the area designated for the development of Nusantara as well as the local communities living there. Mr Arizona, therefore, suggested that more inclusive strategies should be put in place to minimise the effects of this relocation. Reducing the possibility of environmental degradation, poverty as well as potential social and land conflict with the local communities within the region are some of the proposed suggestions made during his presentation.

The webinar drew an audience of 120 participants from both Singapore and abroad. The panel then discussed a range of topics during the Question-and-Answer segment, which included issues such as the prospect of having better opportunities for young people in Nusantara, the possible effects of this project after the end of President Jokowi’s presidency term in 2024, the progress of derivative regulations within the State Capital Law, the potential of the Nusantara Capital City Authority in handling Kalimantan’s indigenous community power and environmental issues, the factors contributing to this relocation decision, the potential negligence toward human rights in pursuit of economic gains and ways to improve the transparency of this new capital project. This session ended off with some closing remarks from both speakers. Both agreed that there is a need to have more transparency and accountability for this project and conduct more conversations with the local communities and general public on this relocation.