IKN Projected to be New Economic Driver, Not Just Administrative Centre

The development of the Nusantara Capital City (IKN), located across parts of Penajam Paser Utara Regency and Kutai Kartanegara Regency in East Kalimantan Province, is projected to function not only as a centre of government but also as a trigger for new economic growth.

“The development of IKN does not only function as a centre of government, but also as a trigger for new economic growth in Kalimantan and eastern Indonesia,” said Rahayu Saraswati D Djojohadikusumo, Deputy Chair of Commission VII of the House of Representatives, during a visit to Sepaku on Friday.

She added that the development of Indonesia’s new capital city is expected to provide a multiplier effect that encourages equitable national development.

IKN has a strategic role in strengthening the national logistics system. Its position in the centre of Indonesia could make it a new distribution hub, significantly lowering the cost of shipping goods to eastern regions.

She noted that shipping costs from Java to Papua are currently higher than to China, a condition that hampers economic growth in eastern areas dependent on supplies from Java. The infrastructure development at IKN, including road networks and inter-regional connectivity, is expected to improve logistics efficiency.

The new capital is also designed as a city of the future, embracing smart city and forest city concepts, which would allow it to become a national model for the use of renewable technology and new energy.

“If IKN becomes a centre of activity, tourists who come can explore the surrounding areas, and this will provide an incentive for tourism villages to develop,” she explained further, highlighting the potential for culture-based and environmental tourism to attract both domestic and international visitors.