April 15, 2024


In eastern Borneo, beyond the thick jungle forests, an epic building project is under way. Giant trucks, cement mixers and diggers lumber along battered roads. Cranes tower overhead. Yellow dust clouds the air, caking everything in reach: the leaves of eucalyptus trees, the sides of passing vehicles and the homes of nearby residents.

This site – a 2,560 sq km area encompassing industrial plantations, mines, Indigenous communities and agricultural land – is to form Nusantara, Indonesia’s new administrative capital.

The decision to move the country’s capital to a new site was taken because Jakarta is rapidly sinking. In a single year, some areas of the capital subside by as muchas 11cm, a problem driven by excessive groundwater extraction and rapid urban development. On top of this, the climate crisis is making storm surges and extreme weather more likely, and causing sea levels to rise. By 2050, about 25% of the capital could be submerged if there is no effective action, according to a study by the government’s National Research and Innovation Agency.

Nusantara’s location, in the province of East Kalimantan, means the new capital will be at the centre of Indonesia’s archipelago of 17,000 islands, to help spread power and wealth more evenly across the country.

The development is welcomed by many in the wider province, who hope it will bring investment and better infrastructure. Officials promise the capital will be a modern, sustainable forest city that coexists with nature and is carbon neutral by 2045.

A 2022 satellite image of the area where Nusantara is to be built, and the Indonesian government’s rendering of the new capital.
A 2022 satellite image of the area where Nusantara is to be built, and the Indonesian government’s rendering of the new capital

Others are less convinced that a new capital is an effective solution to Jakarta’s subsidence, or the best way to decentralise wealth – and it is seen by many as an attempt by the outgoing president, Joko Widodo, to create a grand legacy. Officials, however, promise the capital will be a modern, sustainable forest city that coexists with nature and is carbon neutral by 2045. The presidential palace – to be shaped like the country’s emblem, the mythological bird Garuda – is due to be inaugurated in August.

However, critics say the development is too ambitious and rushed. They also warn it could come with high costs, not only to the state – which will fund 20% of the $32bn bill – but also to the surrounding environment and local Indigenous communities.

A map showing the new city’s expansion area

Construction started in July 2022, and by 2045 the area is expected to be home to 1.9 million people – more than twice the current population of Balikpapan, the nearest city.

“Nusantara is changing the shape of everything,” says Pandi, a member of the Indigenous Balik community. His family has lived in the area, and depended on nature, for seven generations. He has already witnessed the damage brought by industrialisation over the decades, as areas have been deforested to make way for plantations.

“You can see how the plantation company changed the shape of the hill above us now – it made this area prone to flooding in the rainy season,” Pandi says, sitting in the front room of his house, which is built on stilts to avoid intruding waters. The impact of Nusantara, which is far greater in scale, will be worse, he says.

An aerial view of the construction of a multistorey building in Indonesia’s new capital city, Nusantara. Photograph: Anadolu/Getty Images

Already, development has affected the local environment and Balik traditions. A dam has been built nearby, Pandi says, which has altered the flow of water at the nearby river that the local population uses for transportation, as well as fishing and picking nipa leaves. A sacred stone, where his community leaves offerings, has been removed. Graves belonging to Indigenous people have been relocated in some areas.

Most people in Pandi’s community do not have the papers to prove land ownership, or the resources to fight a legal battle in court.


In November last year, 33-year-old Yati Dalia returned home to find a notice plastered to the wall. It ordered her to vacate her home within two weeks. She has lost the house, as well as the small adjoining shop she ran. Her siblings lost their farmland. “It makes us feel so far away from the area and from our families,” says Yati, of members of the Balik Indigenous community who have been forced out.

She has been promised 150m rupiah (£7,500) in compensation, but this is yet to materialise, and it is unlikely to cover the cost of another home nearby, she says; land has become more expensive since the development began.

Yati Dahlia, from the Balik tribe, was ordered to vacate her home. She was promised compensation that has not yet been paid. Photograph: Fu’ad Muhammad/The Observer

Myrna Asnawati Safitri, the Nusantara authority’s deputy for environment and natural resources, says regulation is being finalised that will recognise areas of historical significance to local communities. Issues such as land disputes are long-running and complex, she says, and until recently were the responsibility only of the East Kalimantan provincial government, which is a separate entity.

The scale of Nusantara – and its huge need for water, energy and infrastructure – means that its impact will be felt far beyond the core of the city, where government buildings and offices will eventually stand, through to outer rings of the development and beyond. On an island known as the “lungs of the world”, which is home to some of the most endangered species, this makes planning decisions especially sensitive.


Lamale has spent more than two decades restoring stretches of mangrove trees that line the serene waters near his home in Mentawir. The trees were previously destroyed to make way for prawn and fish farms, and to build harbours.

Mangrove forest in Mentawir village. Photograph: Fu’ad Muhammad/The Observer

His area has been selected as an eco-tourism location in the outer ring of the capital, and so is not at risk of demolition. But a section – about 15km by 2km – of mangrove has fallen victim to the construction of electricity lines, Lamale says, and there’s now a plan to build a toll road that will cut through the area.

It is still not clear how much would be removed. “We can imagine how the mangrove will be affected,” says Lamale. “I hope the development will be as minimal as possible.”

So far, in total, 1,700 hectares (42,000 acres) of mangrove have been cut down, says Mappaselle, a director with the local environment group Pokja Pesisir. He worries that the entire stretch of the estimated 12,000 hectares of mangrove that lines Balikpapan Bay is vulnerable.

“The more mangrove is cut down, the greater the catastrophe,” Mappaselle says. Destroying mangrove could increase sedimentation in the bay, which sticks to the gills of some fish species, smothers their eggs and damages the coral. It also clouds the water, preventing the seagrass from photosynthesising. When seagrass is gone, there’s nothing for the dugong – a marine mammal, sometimes known as a sea cow – to eat.

Such changes could also leave the local fishing communities with no choice but to leave. “The easiest way to push the fishermen out of the area is to damage their three essential parts of the sea: to destroy the mangrove, the seagrass and the coral. There will be no fish there that can be caught by the fishermen,” says Mappaselle.

Mappaselle: ‘The more mangrove is cut down, the greater the catastrophe.’ Photograph: Fu’ad Muhammad/The Observer

Nusantara authorities say that mangrove within the city’s perimeters is protected. However, areas outside are not, and, regardless, enforcement is a challenge.

It is also unclear how the critically endangered local population of Irrawaddy dolphins will be affected in the long term by the project, which has seen an increase in ship traffic.


Some fear that, in an effort to attract private investment – to fund 80% of the development – environmental standards could be weakened. Environmental groups have long warned of companies operating in the area with little oversight.

Sulfikar Amir, an associate professor at Nanyang Technological University in Singapore, was a spokesperson for the opposition presidential candidate Anies Baswedan in last month’s elections. He says it does not appear to be an attractive offer for investors, pointing to a similar project, Forest City in Jahor, Malaysia, which was backed by Chinese funding. “It has become a ghost city and it’s only 20 minutes from Singapore,” he says.

Lamale’s area has been selected as an eco-tourism location in the outer ring of the capital, and so is not at risk of demolition. Photograph: Fu’ad Muhammad/The Observer

Foreign investment for the development has been slow to arrive. The president, Joko Widodo, widely known as Jokowi, said in November last year that the project had received a lot of interest from potential investors, but had yet to draw in foreign funding.

Back in Pandi’s stilted house, he expresses fears his village will be demolished to make way for a water management facility. He cannot comprehend leaving. “My parents’ graveyard is near this house,” he says. “If I must go, I must abandon my tradition, my ancestors’ legacy – and all of the memories here.”



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