Indonesia's new capital project, Nusantara, saw its 2026 budget reduced to 6.3 trillion Indonesian rupiah, approximately $387 million USD, from 43 trillion rupiah, about $3.5 billion USD, allocated in 2024. This 85% decrease reallocates funds to social welfare initiatives, including a nationwide school meal program.

This shift in funding under President Prabowo Subianto's administration signals a change in financial priorities for the ambitious capital relocation. The budget reduction also highlights ongoing challenges for the project's funding model and its public perception, with some critics labeling Nusantara a "ghost city" due to low population and slow private investment.

What the records show

The 2026 budget for Nusantara is approximately 6.3 trillion Indonesian rupiah, which is about $387 million USD. This figure is a significant drop from the 2024 budget of 43 trillion rupiah, or about $3.5 billion USD. The reallocated funds are now primarily designated for social welfare programs, such as a nationwide school meal initiative. Presidential Regulation Number 79 of 2025 formally reclassified Nusantara from a "national capital" to a "political capital". This regulation aims for Nusantara to become the seat of government by 2028, and civil servant relocations are already underway. The project intends to source 80% of its funding from private sector investment, but investor reluctance remains a concern. As of mid-2025, around $4 billion in private sector investment or cooperation deals had been secured.

Timeline

Presidential Regulation Number 79 of 2025 was issued, changing Nusantara's designation and establishing a goal for it to serve as the seat of government by 2028. By mid-2025, approximately $4 billion in private sector investment had been realized for the project. The 2026 budget reflected a reduction in funding for Nusantara. Civil servant relocations are currently in progress.

What changed and for whom

Under President Prabowo Subianto's administration, the budget for Nusantara saw a substantial cut, a departure from earlier allocations. This change means funds have been redirected to social welfare programs, including school meals, directly affecting citizens who benefit from these initiatives. The reclassification of Nusantara from a "national capital" to a "political capital" by Presidential Regulation Number 79 of 2025 also altered its official status and future function. Private investors continue to show reluctance, which affects the project's reliance on their financial contributions.

What the subject has said publicly

Vice-President Gibran Rakabuming Raka and Finance Minister Purbaya Yudhi Sadewa have publicly denied claims that Nusantara is becoming a "ghost town," stating that development is on track. President Prabowo Subianto has reiterated his commitment to the project. Basuki Hadimuljono, the Head of the Nusantara Capital Authority, described the project as "irreversible".

What we could not confirm

PrimaryBrief could not confirm the specific breakdown of the 2026 budget reallocation beyond general social welfare programs, nor the detailed impact on particular construction phases in Nusantara. The exact number of civil servants who have already relocated to Nusantara could not be verified from the provided records. Specific names of private investors or detailed commitments beyond the aggregate $4 billion figure were also not available.