IKN Development Drives 19.9% Economic Growth in Penajam Paser Utara
A study on the economic impact of the first phase of Nusantara Capital City (IKN) development shows a significant 19.9% increase in economic growth in Penajam Paser Utara (PPU) Regency. This figure is higher compared to other regencies and cities in East Kalimantan (Kaltim). The province of East Kalimantan itself also experienced a higher growth increase of 3.7% compared to other provinces on Kalimantan Island.
Deputy for Planning and Land Affairs at the IKN Authority, Mia Amalia, stated that the success of IKN development must be measured by its ability to drive the regional economy and provide benefits to the community. She noted that the initial economic impact was most strongly concentrated in PPU as the core development area, driven by government spending and a surge in investment, with the construction sector being a primary driver of the Gross Regional Domestic Product (GRDP).
The development impact has also begun to spread to surrounding areas through the demand for goods and services, logistics, accommodation, trade, and other supporting sectors. Mia explained that economic linkages are forming between the Nusantara area and the buffer zones in East Kalimantan. Looking ahead, the second phase of IKN development is projected to have an even greater economic impact, contributing significantly to the GRDP of both PPU Regency and East Kalimantan Province with a sustainable positive effect on economic growth.
She emphasised that this projection is crucial amidst global geopolitical dynamics and East Kalimantan’s need to strengthen its economic transformation from extractive sectors to more productive and value-added industries. Therefore, the impact of IKN development must be managed to move beyond construction activities towards strengthening local supply chains, workforce capacity, and the involvement of regional business actors. This management direction aligns with the development concept of the Nusantara Economic Superhub (SEN) to expand the long-term impact of IKN development, positioning the Nusantara area as a new growth centre that drives East Kalimantan’s economy towards a more productive, value-added, and sustainable future.