Nusantara Budget Halved, Scope Officially Downgraded to 'Political Capital'

As of May 2026, Indonesia's new capital Nusantara in East Kalimantan faces deepening fiscal and logistical constraints. The 2026 budget for Nusantara stands at Rp 6.3 trillion — less than half the Rp 13 trillion spent in 2025 — as Prabowo's government navigates competing demands from the free school meals program, defense modernization, and a slowing economy. The city's scope has been formally downgraded from a full replacement national capital to a 'political capital' to be inaugurated by 2028, with administrative and economic functions remaining largely in Jakarta. Prabowo made his first presidential visit to the site only in January 2026 — more than a year after taking office. Only 1,700–4,100 civil servants have been ordered to relocate within 2026, far short of original targets. NPR and international media report the project faces 'mounting doubts,' with SoftBank having withdrawn its investment pledge in 2022 and most private investment not materializing.