Honestly, if you ask someone today what the capital city of Indonesia is, they’ll probably say Jakarta without blinking. They aren’t technically wrong, but they aren't exactly right either. It is a bit of a "it’s complicated" relationship status on a national scale.
Indonesia is currently in the middle of a massive, $32 billion identity crisis.
For decades, Jakarta has been the heart, the lungs, and the bank account of the nation. But it is also sinking. Fast. In some parts of North Jakarta, the ground drops by about 25cm every single year. You can’t really run a G20 economy from a city that's slowly becoming an aquarium. So, the government decided to do something wild: they are building a brand-new city from scratch in the middle of a jungle in East Kalimantan. It’s called Nusantara.
The Two-Capital Reality of 2026
Right now, as we sit in early 2026, we are living through a weird transition phase. President Prabowo Subianto, who took over from Joko Widodo (Jokowi) in late 2024, just finished his first official overnight stay in Nusantara this January. He’s doubling down on the project, but with a slightly different flavor than his predecessor.
While the original dream was to move everything by 2024, reality had other plans. Pandemic delays and funding hurdles shifted the goalposts. Currently, Jakarta remains the de facto functional hub, but the official status of the capital city of Indonesia is shifting toward Nusantara as the "political capital."
Think of it like a long-distance move where you’ve sent the heavy furniture ahead but you’re still sleeping on a mattress in your old apartment.
Why Moving the Capital City of Indonesia Was Not Optional
Jakarta is tired.
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The city was never built to hold 10 million people (or 30 million if you count the greater metropolitan area). The traffic is legendary in a bad way. People lose years of their lives sitting in gridlock on Jalan Sudirman. Beyond the traffic, the environmental math just doesn't add up anymore.
- The Sinking Problem: Excessive groundwater extraction means the city is literally collapsing into the earth.
- The Sea Level Rise: While the city goes down, the ocean is coming up.
- The Java Centralism: About 60% of Indonesia’s population and over half of its economic activity are crammed onto Java island. It’s lopsided.
Nusantara is supposed to fix this by moving the center of gravity 1,200 km away to Borneo. It’s a move for "Indonesia-centrism" rather than "Java-centrism."
What is Actually Happening in Nusantara Right Now?
If you visited the site today, you wouldn't see a finished metropolis. You’d see a massive construction site that looks like a sci-fi movie set in a rainforest.
The centerpiece is the Garuda Palace. It’s the presidential office, and it is shaped like the mythical bird with giant metallic wings. It's bold. It's a statement. But around it, things are still very much under construction.
Just this week, the Minister of Religious Affairs, Nasaruddin Umar, was checking on the progress of the State Mosque. They are aiming for it to be fully operational for Ramadan and Eid al-Fitr in 2026. It’s a huge building, meant to hold about 29,000 people initially, eventually scaling up to 60,000. They are also finishing up a Catholic Basilica and other houses of worship right nearby. The government is trying really hard to show that this new capital city of Indonesia is for everyone, not just one group.
But let’s be real—the "political capital" designation for 2028 is the new realistic target. That’s when the legislative and judicial branches (the people who make and judge the laws) are supposed to officially set up shop.
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The Prabowo Pivot: From "National" to "Political" Capital
There has been a lot of chatter lately about a "downgrade."
Under President Prabowo, there’s been a shift in terminology. Some are calling Nusantara the "political capital" while Jakarta remains the "economic capital." Honestly, this makes a lot of sense. You can’t just tell the stock exchange and the massive corporate headquarters of Southeast Asia’s biggest economy to pack up and move to a forest overnight.
Prabowo’s administration is dealing with a tighter budget. They’ve allocated about 48.8 trillion rupiah for the project through 2029, which is a big chunk of change, but it's only about 60% of what was being spent in the peak Jokowi years. They have to balance building a city with other big promises, like the national free meal program for school kids.
What Most People Get Wrong About the Move
Many think Jakarta will just be abandoned.
That is never going to happen. The government is actually spending billions—nearly $40 billion—on the "Great Sea Wall" and other infrastructure to save Jakarta. The city will remain the New York City of Indonesia, while Nusantara aims to be the Washington D.C.
Another misconception? That the jungle is being destroyed for no reason. The master plan, designed by the studio Urban+, claims to be a "smart forest city." The goal is for 70% of the area to remain green. Whether they can actually pull that off while building highways and luxury hotels like the Swissôtel (which is already open there) is the big question environmentalists are asking.
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Life in the Transition: What This Means for You
If you are planning to visit or do business in the capital city of Indonesia, you need to know which one you’re talking about.
- For Business: Stick to Jakarta. The Special Region of Jakarta (DKJ) law passed recently ensures it keeps its status as the financial powerhouse. Most embassies are still there, and the major players aren't moving yet.
- For Tourism: Nusantara is actually becoming a weirdly popular "dark tourism" or curiosity spot. Between 3,000 and 5,000 people visit the site every day just to see the progress. You can stay at the Swissôtel Nusantara now, but don't expect a bustling nightlife yet. It's very much a "work in progress."
- For Investment: The government is offering crazy land rights—up to 190 years in some cases—to get people to build in Borneo. It’s a high-risk, high-reward play.
The Road to 2045
The finish line isn't 2026 or even 2028. The full vision for the capital city of Indonesia is tied to "Golden Indonesia 2045," the centenary of their independence. By then, they want 2 million people living in Nusantara.
Right now, it’s a city of civil servants, construction workers, and a whole lot of mud.
It is easy to be cynical. Critics call it a "white elephant" project. But when you look at the map of Jakarta and see the water creeping up the streets of Muara Baru, you realize they didn't have much of a choice. They had to go somewhere.
What to do if you're watching this space
Keep an eye on the Presidential Decrees. Jakarta technically remains the capital until the President signs the official "I'm moving out" paper. That decree has been teased for years but hasn't been finalized yet. Until that ink is dry, Jakarta holds the title, but Nusantara holds the future.
If you're traveling, check your flight codes. You'll likely fly into Balikpapan (BPN) and then take a toll road into the new capital area. It’s a glimpse into what a 21st-century city looks like when it's built from a blank slate.
Actionable Insights for Following the Capital Move:
- Check the status of Jakarta’s DKJ Law: This governs how the old capital will be run as an economic hub without the "capital" title.
- Monitor Nusantara National Capital Authority (OIKN) updates: This is the specific body that runs the new city; their announcements are more accurate than general news rumors.
- Watch the 2028 legislative completion: This will be the true test of whether the move is permanent or just a symbolic gesture.
Indonesia is rewriting its own map. It’s messy, it’s expensive, and it’s arguably the most ambitious urban planning project on Earth right now. Whether it becomes a thriving "forest city" or a ghost town in the jungle is a story that is still being written, one bag of cement at a time.