By Simarangkai )*
Infrastructure development in the Indonesian Capital City (IKN) of East Kalimantan is concrete evidence of President Joko Widodo’s performance in encouraging positive investment growth in Indonesia. Along with the increasingly mature development of basic infrastructure, the interest of foreign investors to invest in the region continues to increase. This shows that IKN is not only a symbol of new regional transformation, but also has great potential as a new economic center in Indonesia supported by sustainable investment growth.
According to Investment Minister/Head of Investment Coordinating Board (BKPM) Rosan Roeslani, the ecosystem in the IKN has begun to form, and this is one of the factors driving foreign investor interest. In the past two weeks, foreign investment has begun to flow into the IKN, with five new foreign companies committing to invest US$165 million or around Rp2.51 trillion. One of these foreign companies, Sembcorp Utilities PTe Ltd from Singapore, has invested US$65 million to build a 50 megawatt (MW) solar panel, which is part of Indonesia’s efforts to develop renewable energy.
Good infrastructure development is key to attracting investors. Rosan stated that his party continues to be proactive in attracting investors and ensuring that regulations and land provision are adequate. This certainly reflects Indonesia’s readiness to welcome sustainable investment, along with the formation of an economic ecosystem that is starting to function in the IKN.
One positive indicator of investment growth in the IKN is the hotel sector, which usually enters at the final stage in the development of a new city. However, under President Jokowi’s leadership, this sector has started to move faster than the general trend. The General Chairperson of the Indonesian Hotel and Restaurant Association (PHRI), Hariyadi BS Sukamdani, said that investment in the hotel sector in the IKN rarely occurs at an early stage like this. Usually, hotels will enter when there is certainty of the number of residents and sufficient demand in the area. However, the fact that there are already more than 10 hotel investment projects in the IKN shows that investors believe in the future growth prospects of the IKN.
Several big names in the hospitality industry have started investing in the IKN. The Nusantara Consortium, led by businessman Sugianto Kusuma, became a pioneer by opening Swissotel Nusantara, which is now operational and used by high-ranking officials during the celebration of the 79th Anniversary of the Republic of Indonesia on August 17, 2024. In addition, other hotel investment projects such as the Vasanta Hotel, Four Points Hotel by Sheraton, and several hotel projects from major developers such as PT Pakuwon Jati and PT Intiland Development also show that the IKN has bright prospects as a new economic center.
The success of basic infrastructure development in the IKN is an important factor that encourages investors to invest in the region. Roads, office areas, and other public facilities that continue to be developed are the main attractions for investors. President Jokowi has determined that infrastructure development in the IKN is one of the priorities in order to move the nation’s capital from Jakarta. With increasingly ready infrastructure, not only the hotel sector, but also other sectors such as education, energy, and technology are starting to be interested in investing.
One important example is Raffles Education Limited, a Singaporean company engaged in education, which is also interested in investing in the IKN. This shows that good infrastructure opens up opportunities for more diverse investments, not just limited to traditional sectors such as property and hospitality.
The rapid growth of investment in the IKN not only has a positive impact on the development of the new capital city, but also on the Indonesian economy as a whole. Investments entering the IKN will create new jobs, encourage the growth of related sectors, and increase Indonesia’s competitiveness at the global level. In addition, with major investments in the renewable energy sector, such as the solar panel project built by Sembcorp Utilities, Indonesia is getting closer to its target of becoming a country with environmentally friendly energy sources.
This success is certainly inseparable from the active role of the government in creating a conducive investment climate. President Jokowi has succeeded in proving that with the right policies, investment can continue to grow even amidst difficult global challenges. Regulatory reform, bureaucratic improvement, and massive infrastructure development are the keys to investment growth in Indonesia, especially in the IKN.
The future of the IKN as a new economic center in Indonesia looks increasingly bright with the increasing number of investors interested in investing in the region. The government through the Ministry of Investment and BKPM continues to be committed to attracting investments that have a sustainable and continuous impact. This is in line with President Jokowi’s vision to make the IKN a modern, sustainable, and environmentally friendly city.
With all the potential that the IKN has, it is no exaggeration to say that the infrastructure development that has been carried out during President Jokowi’s administration is one of the main factors driving positive investment growth. Good infrastructure opens the door to investment opportunities, creates jobs, and improves people’s welfare. Thus, the development of the IKN is not only a symbol of Indonesia’s transformation, but also real evidence that the Jokowi administration has succeeded in creating a conducive environment for investment and economic growth.
This success is real evidence of President Jokowi’s performance in encouraging sustainable development and opening up opportunities for a better future for Indonesia.
)* the author is a contributor to the Nusantara Madani Institute