Why Indonesia’s New Capital Nusantara Is On The Brink Of Becoming A Ghost Town

Last Updated:October 29, 2025, 20:24 IST

Nusantara, Indonesia’s planned sustainable capital, faces budget cuts and investor doubts, raising concerns about its future.

Nusantara was announced in 2019 by former Indonesian President Joko Widodo.

Indonesia’s ambitious new capital Nusantara was meant to be a shining symbol of progress- a sustainable metropolis to replace overcrowded, sinking Jakarta. Three years on, the project is struggling. Empty streets, slashed budgets and fading investor confidence have sparked fears it could become a ghost city before it’s even complete.

Why Was Nusantara Built?

Announced in 2019 by former Indonesian President Joko Widodo, the $32 billion city was envisioned as a “green and smart" capital that would relieve Jakarta’s congestion and environmental strain. The plan called for 1.2 million residents by 2030 and a new seat of government designed to symbolise Indonesia’s modern identity.

What’s Gone Wrong With Nusantara?

Under Indonesia’s new President Prabowo Subianto, who took office in October 2024, state funding for the project has plunged by more than half- from £2 billion in 2024 to £700 million this year. Just £300 million has been allocated for 2026, a third of what was requested. Private investment has also fallen more than £1 billion short of targets. Prabowo Subianto has not yet visited the site as President and quietly downgraded Nusantara’s status to a “political capital" in May- a move only made public months later, shaking investor confidence.

Who’s Still Living In The New Capital?

Just 2,000 civil servants and 8,000 construction workers currently live in Nusantara= far below projections. While roads, apartment blocks, hospitals and government buildings have been built, much of the city remains under construction.

Small businesses that thrived during the early construction boom say trade has collapsed.

Is The Government Still Committed?

Officials insist the project is on track. Basuki Hadimuljono, head of the Nusantara Capital Authority, denied any slowdown, saying funds had been “reallocated, not cut."

“The funding is there, the political commitment is there," he said, adding, “Why should we doubt that?"

The government maintains that only a quarter of the 252,000-hectare site will be developed, with the rest preserved as green space, describing Nusantara as an environmental “model city."

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