The following article was reproduced from Kumparan.

Professor Andrew Delios from the National University of Singapore Business School has expressed scepticism regarding the potential impact of the new capital city, Ibu Kota Nusantara (IKN), on reducing migration to Jakarta.

Professor Delios compared IKN to other newly developed capitals, such as Putrajaya in Malaysia and Canberra in Australia. He noted that the primary objective of IKN is to alleviate the pressures on Jakarta, including its high population density.

“Will Nusantara prevent people from migrating to Jakarta? Probably not,” Professor Delios remarked.

For IKN to contribute meaningfully to Indonesia’s economy, Professor Delios emphasised that the city must grow to support millions of residents over time. He also highlighted the importance of developing social infrastructure, such as restaurants and entertainment venues, which typically emerge as population migration occurs in a region.

“Nusantara needs to be more than just an administrative hub if it is to have a meaningful impact on Indonesia’s economic and social landscape,” he stated.

Migration Trends to Jakarta

Statistics Indonesia (BPS) reported in 2022 that Jakarta has experienced significant migration, with 212,457 new arrivals and 797,468 people leaving the city. The term “risen migrants” refers to those who now live in a different area than they did five years ago. Between 2017 and 2022, more people left Jakarta than moved in.

West Java Province, including cities like Depok, Bekasi, and Bogor, was the primary destination for those leaving Jakarta. These cities serve as critical buffer zones around the capital.

Broader data from BPS in 2020 showed that 56.7 percent of Indonesia’s population lives in urban areas. According to the Ministry of Home Affairs, this figure is expected to rise to 66.6 percent by 2035, meaning only 33.4 percent of the population will remain in rural areas. Key factors driving this migration include job opportunities, education, healthcare, infrastructure, and lifestyle changes.

Suhajar Diantoro, Secretary General of the Ministry of Home Affairs, stated that Jakarta will continue to face urbanisation pressures even after it becomes the Special Capital Region (DKJ) following the relocation of the capital to Nusantara.

Challenges and Opportunities Under Prabowo’s Leadership

Professor Delios also discussed the challenges and opportunities faced by President-elect Prabowo Subianto, stressing the need for a credible and transparent policy environment.

In an exclusive interview with Kumparan, Professor Delios noted that since the 1997 crisis, Indonesia has struggled with policy fragmentation, which has hindered the creation of a favourable business environment. However, since 2010, Indonesia has made progress with more centralised coalitions and greater transparency.

He commended Indonesia’s efforts to combat corruption, stating they have been more effective than in neighbouring countries like Malaysia, the Philippines, and Vietnam. Professor Delios hoped that Prabowo would continue the credible and transparent policies established during President Joko Widodo’s administration to attract foreign investment.

He believes Indonesia has the right conditions to draw foreign investors, including strong economic growth, a young and educated population, and a government focused on enhancing Indonesia’s regional visibility.

“Foreign investors look for credibility in policy. They want commitment and certainty,” Professor Delios concluded.

Professor Andrew Delios was first interviewed in Kumparan.