Jumat, September 29, 2023

IKN Nusantara at the Crossroads

Muhammad Dudi Hari Saputra
Lecturer at Kutai Kartanegara University and Former Industrial Ministry Special Analyze
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In the 21st century, to cover the limitations of natural resources, industrialization is being carried out more vigorously and trade liberalization is expanding to support human consumption needs and increase economic growth.

However, a study conducted by Richard Auty gave the hypothesis about a country that has abundant natural resources can experience a paradox,  when the natural resource wealth turns out to be unable to prosper the country or community where the natural resources are located, this phenomenon is known as the natural resources curse, and this hypothesis is strengthened by the findings of Jeffrey Sachs and Andrew Werner about the countries that are rich in natural resources experience low economic growth and infrastructure development (Jeffrey Sachs and Andrew Werner, 1995).

To answer this, Ragnar Torvik once made a study, that why some countries with abundant natural resources can succeed and some fail, this is due to several factors, such as how far the income from the natural resource sector is intended, how the institutions manage it and the most important thing is the latest industrialization whether carried out or not (Ragnar Torvik, 2009).

This improvement phenomenon exists when there is a strong commitment to the central government of Joko Widodo to move the country’s capital to East Kalimantan, through the IKN Law which has ratified altogether with the Indonesian House of Representatives on January 18, 2022, this has become a great momentum and milestone for the entire Indonesian nation, especially for the people of East Kalimantan in looking at the future of the nation’s journey in facing the challenges and spirit of the times (zeitgeist) which is rapidly changing (dromology) (Yasraf Amir Piliang, 2014).

The National Capital of the Nusantara at the Crossroads

This paper focuses more on the level of analysis of the good and bad impacts when the IKN development has been carried out, Andrew Smith makes an analogy like a stone, whether this Nusantara IKN becomes a stumbling block or according to shared expectations that this is a stepping stone to move better (Andrew Smith, 2015). This is the same as the decision to develop the Nusantara IKN in East Kalimantan, the question is at a crossroads whether this makes Indonesia more inclined to inequality and decline, or justice and progress.

First, from the perspective of IKN Nusantara to East Kalimantan as a barrier, this is as described by Didin Damanhuri in Media Republika that the IKN development decision should be postponed considering that from a state financing perspective it is not 100% ready because of the high debt and the effects of the COVID-19 pandemic that have not completely disappeared. In addition, the issue of oligarchs is also increasing, that the transfer of IKN Nusantara to East Kalimantan will only lead to sharper economic inequality between the oligarchic groups (the economic rulers) and the ordinary lower class. This view is reinforced by an article released by Jatam (Jaringan Advokasi Tambang) et al. That IKN Nusantara will only benefit for oligarchic groups with economic and political power, which mainly have plantation and mining land concessions, besides that the construction of a new capital city is considered to only increase the damage to the ecology and flora and fauna in the IKN Nusantara – East Kalimantan area (Jatam, 2022).

Second, from the perspective of IKN Nusantara as a stepping stone, it is understood that where there are challenges there are opportunities, as the author explained earlier that East Kalimantan is an area rich in natural resources but has a low economic growth rate and high unemployment, this is what is often called As the curse of natural resources, Michael Ross explained that this happens because the areas rich in natural resources are in an isolated enclave position from the industrial trade route, so there is no diversification and the industry produces are only raw materials which have low values (Michael Ross, 2012).

In addition, Immanuel Wallerstein explained the areas that are rich in natural resources are often only periphery, not core (Wallerstein, 2004). That’s why areas rich in natural resources are often left behind, because they are only considered as a supply area for raw materials to be brought to the core area, in the Indonesian context, East Kalimantan’s wealth is only supplied to the core area of the capital Jakarta and its surroundings to become finished products, and income of the natural wealth itself, leaving only a small amount for East Kalimantan and most of it for the central government, in this case, is Jakarta and the island of Java.

So, the decision to move the capital city from Jakarta to IKN Nusantara in East Kalimantan is an extraordinary stepping stone, because the natural resource-rich suburb called Kaltim itself has now become the core area of Indonesia’s Capital, this refutes the theory of the disparity of the core and periphery areas, and this is true as stated by President Jokowi announced that the transfer of IKN to East Kalimantan is an effort to create a more equitable and because it is located in the middle so that it is easily accessible to the western and eastern regions of Indonesia (Indonesia Sentris).

In addition, a large infrastructure project in East Kalimantan due to the development of the IKN will cost a large amount of money, resulting in an effect on the economic wheels that move and grow in East Kalimantan, and there will be a multiplier effect from the high economic activity which will affect increasing income and consumption, in addition to long-term policies which will naturally make East Kalimantan grow from a region that only supplies raw material sources to a central area of economic-political-social-cultural activities, where the industrialization process naturally occurs and the service sector is alive and well various sectors.

From the notes of Mulawarman University economist Aji Sofyan Effendi that moving the capital city to East Kalimantan will cause the economy to be more diversified towards a more labor-intensive sector, so it can help reduce disparities between income groups, both at the regional and national levels, assuming an increase 0,1% in national GDP, 1,37% increase in the price of labor, and 0,23% increase in the price of capital (Aji Sofyan, 2022).


In conclusion, both negative and positive perspectives from the IKN Nusantara development process in East Kalimantan must be studied and analyzed prescriptively, so that all existing facts can be validated and analyzed to be used as formulations in making the best decisions for now and in the future for both IKN Nusantara in particular and Indonesia as a general, thus this IKN has distribution positive impact on development, instead of the distribution of the problem from the previous capital to East Kalimantan, and it has become our hope for Indonesia, which grows its economy but does not harm the environment and is more prosperous and justice for its people by not only enriching certain groups.

Muhammad Dudi Hari Saputra
Lecturer at Kutai Kartanegara University and Former Industrial Ministry Special Analyze
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