The Nusantara Capital City (IKN) is no longer positioned merely as Indonesia’s new seat of government. Along with the acceleration of infrastructure development and the presence of various modern public facilities, Nusantara is now projected to become a new center of economic growth, a world-class tourism destination, and an investment magnet that supports Indonesia’s national economic transformation.
From the outset, the development of IKN has been designed with a different approach. The government has positioned Nusantara as a smart forest city that combines modern urban planning, digital technology, environmental sustainability, and a green economy. Therefore, the success of its development is measured not only by the construction of government buildings, but also by the area’s ability to attract large-scale private investment.
Infrastructure Becomes the Foundation of Nusantara’s Competitiveness
Optimism about the future of IKN emerged during the specific working visit of Commission VII of the House of Representatives (DPR RI) to the Core Government Center Area (KIPP) of Nusantara on July 10, 2026. Deputy Chairperson of Commission VII of the DPR RI, Rahayu Saraswati Djojohadikusumo, stated that the development of roads, toll road access, utility networks, and regional connectivity will become the primary foundation for the growth of tourism and investment.
According to her, the presence of modern infrastructure will generate a multiplier effect for surrounding areas such as Balikpapan, Samarinda, and North Penajam Paser. The impact will not only increase tourist arrivals but also stimulate the transportation, hospitality, culinary, creative economy, trade, and service sectors.
“IKN has the potential to become the new face of Indonesia that is capable of attracting both domestic and international tourists,” she said.
Various strategic projects such as toll roads leading to IKN, smart transportation systems, residential areas, green open spaces, raw water networks, energy infrastructure, digital telecommunications, and public facilities continue to be accelerated to support the gradual operation of Nusantara.
Not Merely a Government City, but an Investment City
Behind the physical development lies a much greater vision. Nusantara is being prepared as a national investment hub capable of creating a world-class business ecosystem.
This concept can only be realized if infrastructure development goes hand in hand with the development of investment and financial support facilities. The presence of business districts, financial centers, integrated licensing services, commercial areas, innovation centers, research facilities, international education and healthcare facilities, hotels, convention centers, and MICE areas will become key factors in increasing investor attractiveness.
Thus, every development of roads, utilities, ports, logistics areas, and public transportation not only serves the community but also creates new economic value capable of attracting long-term investment.
Investment Incentives Must Continue to Be Strengthened
The government has actually laid a strong foundation for investment inflows into IKN. Various fiscal incentives such as tax holidays, tax allowances, import duty exemptions for certain sectors, licensing facilitation through OSS, and Super Tax Deduction facilities for research, development, innovation, vocational education, and human resource development activities need to continue to be widely promoted to the business community.
These instruments are important attractions for investors because they reduce investment costs while increasing business certainty.
On the other hand, various creative financing schemes such as Public-Private Partnerships (PPP), direct investment, sovereign wealth funds, green financing, and the participation of state-owned enterprises and the private sector need to continue to be expanded so that the development of IKN does not solely depend on the State Budget (APBN).
The greater the investment inflows, the faster public infrastructure can be provided.
The 20 Percent APBN and 80 Percent Investment Ratio Must Become a Shared Commitment
From the beginning, the government designed the financing of IKN development with approximately 20 percent coming from the State Budget (APBN) and 80 percent from investment and other non-APBN funding sources. This financing pattern is an important strategy to ensure sustainable development without placing excessive pressure on the country’s fiscal capacity.
Therefore, this mindset must continue to be upheld throughout every stage of Nusantara’s development.
If the annual APBN allocation to the Nusantara Capital Authority ranges from IDR 6 trillion to IDR 11 trillion, then ideally the development should also generate approximately IDR 24 trillion to IDR 44 trillion in new investment each year so that the 20:80 financing composition can truly be realized.
With this ratio, development will not only proceed more rapidly but will also create a much greater multiplier effect on national economic growth.
The higher the investment inflows, the more new areas can be developed, the more jobs will be created, and the greater Nusantara’s contribution to Indonesia’s economy.
Tourism and MICE Will Become New Economic Engines
Unlike conventional capital cities, IKN offers a new experience through the integration of green spaces, technology, culture, and sustainability.
The organization of various national and international events, including Meetings, Incentives, Conferences, and Exhibitions (MICE), is expected to strengthen Nusantara’s position as Indonesia’s new destination.
In addition, conservation areas, green open spaces, cultural centers, sports tourism, wellness tourism, cycling routes, and community activities such as fun runs are considered capable of becoming sustainable tourism attractions.
The opening of the Core Government Center Area (KIPP) to the public has also begun attracting tourists who wish to witness firsthand the development of Indonesia’s new capital city. This activity is expected to accelerate the growth of the service, trade, culinary, transportation, and creative economy sectors in East Kalimantan.
MSMEs and National Industry Must Become the Winners
Commission VII of the DPR RI also highlighted the high level of Domestic Component Level (TKDN) utilization in the development of IKN.
According to Rahayu Saraswati, Nusantara must become a showcase of the capabilities of Indonesia’s national industry while creating broader opportunities for local businesses.
Since more than 90 percent of Indonesian business actors come from the MSME sector, the development of IKN must increase business opportunities, expand markets for local products, and create new jobs for surrounding communities.
Head of the Nusantara Capital Authority, Basuki Hadimuljono, emphasized that the development of Nusantara is not only focused on physical infrastructure but also on strengthening MSME capacity through training, business mentoring, the provision of business spaces, and improving product quality so they can compete in the new capital city.
Collaboration Becomes the Key to Accelerating Nusantara
The development of IKN is ultimately not merely a capital city development project, but a project for Indonesia’s economic transformation. Its success will largely depend on the government’s ability to build collaboration among the State Budget (APBN), private investment, state-owned enterprises, the business sector, financial institutions, and the public.
Therefore, infrastructure development must continue to be accompanied by strengthening the investment climate, regulatory certainty, the provision of business facilities, and the promotion of the various fiscal incentives prepared by the government.
The stronger the investment ecosystem is built, the greater the opportunity for Nusantara to develop into a modern government center, a new business hub, a world-class tourism destination, and a new engine of Indonesia’s economic growth.
By maintaining the financing commitment of 20 percent from the State Budget (APBN) and 80 percent from investment, IKN has a significant opportunity to develop more rapidly through the collaboration of all stakeholders. This approach not only eases the burden on the State Budget but also ensures that every rupiah of government spending serves as leverage for greater investment inflows, enabling the vision of Nusantara as a world city for all to be realized sustainably.
Written by: Ari Supit
Forum Bersama IKN
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