Is Indonesia trying to ‘cover up’ poor foreign investor interest in Jokowi’s Nusantara capital project?
- President Joko Widodo says Indonesia is prioritising domestic investors for his legacy project to shift the nation’s capital
- But critics say confusion over the project, as well as ‘election drama’ and high interest rates, are pushing foreign investors to adopt a wait-and-see approach
Critics also say a claim by authorities that domestic investors are being prioritised in the project is merely a cover-up for the lukewarm appetite for Nusantara, tipped as the nation’s next capital.
Confusion over the government’s infrastructure focus with main island of Java still receiving massive projects, as well as “election drama” and high interest rates deterring global investors, have contributed to a wait-and-see attitude, according to the observers.
Widodo first indicated the state of foreign investments in Nusantara during a state visit to the United States last week. On Monday, he reiterated “no real investment” had been made by foreign backers in the project, aimed at housing at least 1,200 civil servants by August next year.
“So far, more than 300 [Letter of Intents] have been signed. I think that will continue to increase soon. But to this day, there is no real [investment] that has been commenced,” Widodo told reporters on Monday.
The Nusantara Capital Authority said that 305 Letter of Intents (LOIs), or documents outlining the understanding between two parties, had been signed so far between the authority and investors, most of whom were Indonesian companies, with 172 LOIs.