On 18 January 2022, Tuesday, Suharso Monoarfa, Indonesia’s National Development Planning Minister, announced the name of the new capital of Indonesia in East Kalimantan as Nusantara. The new capital city bill was approved by President Joko Widodo in a working committee on 14 January 2022.

Being the closest neighbour to Nusantara, Sarawak will benefit from the significant economic spillover as Indonesia moved its capital from Jakarta to Kalimantan. In December 2021, South China Morning Post (SCMP) reported that Widodo made a $132 billion ‘green’ industrial estate deal. China and the United Arab Emirates investment on this deal would go to establish the new capital.

As per Borneo Post Online, Datuk Seri Abdul Karim Rahman Hamzah, the Minister of Tourism, Creative Industry and Performing Arts of Sarawak, says the developers are in a good position to tap this opportunity at full capacity. Previously, the construction industry benefited when the capital city of Malaysia was moved from Kuala Lumpur to Putrajaya. He believes the same scenario exists here. It can be a strategic move for Sarawak developers to ramp up their construction with the interest of Nusantara’s residents in mind.

He said this during a press conference in Borneo Convention Centre in Kuching on 21 January on the launch of the largest Sarawak themed mural painting.

Which property segment can developers focus on?

Datuk Seri Abdul Karim Rahman Hamzah believes the food and construction industries will benefit most from the new capital. On the construction side, developers can build restaurants and hotels for incoming visitors from East Kalimantan. They may also tap into industrial projects for new investors from Nusantara who might explore the profitable ventures in Sarawak, as it is the border state from the new capital. Besides, the 11 million people to be relocated to the capital may also be interested to buy residential properties in Sarawak.

What offers Sarawak developers new opportunities in East Kalimantan?

• Balikpapan and Samarinda are the two nearest cities to the new capital, Nusantara. Currently, there are no direct road, air or sea links for easy commuting between the cities. Sarawak’s developers can plan and implement relevant infrastructure to connect the cities.
• The construction of trans-Borneo highway, which is in progress, will help to move goods and services across the Sarawak and Kalimantan border.
• Sarawak, especially Kuching is a popular destination for residents of Singkawan and Pontianak for tourism, food, medical service and education. With the announcement of the new capital, the Indonesian government is planning to relocate 11 million people including 1.5 million government servants from Jakarta to Nusantara. If this happens, Sarawak can extend the same services to the new residents of Nusantara as they are doing with Singkawan and Pontianak residents. This can open more opportunities for Sarawak developers to build new infrastructures for this influx of residents.
• The new capital is expected to increase the flight frequency between Kalimantan and Sarawak. Thus, developers can build accommodations for the incoming visitors in Sarawak.