IKN Authority Confident Phase 2 Development Will Further Boost Surrounding Economy
Penajam Paser Utara (ANTARA) - The Nusantara Capital City (IKN) Authority is confident that the second phase of development of Indonesia’s new capital, spanning parts of Penajam Paser Utara and Kutai Kartanegara Regencies in East Kalimantan Province, will further stimulate the surrounding regional economy.
“The economic impact is expected to increase during the second phase of IKN development (2/2025-2029),” stated Mia Amalia, Deputy for Planning and Land Affairs of the IKN Authority, when questioned regarding the IKN projections in Sepaku, Penajam Paser Utara, on Saturday.
Results from the IKN Authority’s study on the first phase of the new capital’s development (2022-2024 period) noted that the economy of Penajam Paser Utara Regency, as the core development area, grew by approximately 19.9 per cent, higher than other regencies/cities in East Kalimantan Province.
The economy of East Kalimantan Province also grew by around 3.7 per cent, which is quite high compared to other provinces on Kalimantan Island, driven by government spending and a surge in investment, with the construction sector becoming one of the main drivers of the GRDP structure following the progress of IKN development, said Mia Amalia.
Gross Regional Domestic Product (GRDP), according to her, is projected to provide a significant additional contribution to the surrounding areas, with a sustainable positive impact on economic growth.
“The impact of IKN development is managed by transitioning from construction activities towards strengthening local supply chains, workforce capacity, the involvement of regional business actors, and the development of other sectors,” she said.
This projection, she continued, is vital amidst global geopolitical dynamics and the needs of East Kalimantan Province, strengthening the economic transformation from extractive sectors towards more productive and value-added sectors.
According to her, this management direction aligns with the development concept through the Nusantara Economic Superhub (SEN) to expand the long-term impact of IKN development.
Through the interconnectedness of Indonesia’s new capital, Penajam Paser Utara and Kutai Kartanegara Regencies, Balikpapan and Samarinda cities, and surrounding areas, the development of IKN is directed to serve as a new growth centre, said Mia.
This new growth centre is aimed at boosting the economy of East Kalimantan Province, moving towards more productive, value-added, and sustainable sectors.
The impact of IKN development is beginning to flow to surrounding areas through the demand for goods and services, logistics, accommodation, transport, trade, and other supporting sectors.
IKN development activities are starting to form economic linkages with buffer regions within East Kalimantan Province, she explained, rather than relying solely on the Government Core Area (KIPP) of Indonesia’s new capital.
“The success of IKN is not only measured by the number of buildings, but also by economic growth and the benefits felt by the local residents,” she added.