STRATEGIC ASSESSMENT. Marriott International has announced it will open three hotels in Indonesia’s new capital city on the island of Borneo in cooperation with a local partner, in a move certain to be seen by the Indonesian government as a vote of confidence in the massive project.
The U.S. global hotel operator said it signed a deal with Indonesian real estate developer Pakuwon Jati to launch three properties in Nusantara, where the government plans to start moving some functions from the current capital of Jakarta in August of next year.
More Indonesian businesses are announcing initiatives to invest in the country’s ambitious multibillion-dollar capital relocation project as the start of next year’s scheduled move gets closer, even while interest from foreign companies remains tepid over concerns a new president to be elected in February could curtail the plan. Indonesian President Joko “Jokowi” Widodo, who must step down after the presidential election, has preparations in place for some government functions to be transferred to the new capital, Nusantara, next August.
The National Capital City Authority (OIKN) has said that the groundbreaking for projects funded by private investors in the new national capital (IKN) of Nusantara, East Kalimantan, will commence next week. Meanwhile, the progress of state-funded construction projects in Nusantara has reached more than 46 percent, OIKN Deputy Agung Wicaksono said.
Next week, private investors will start building hotels, hospitals, malls, and sports facilities outside of the state budget’s scheme. Agung added that the agency had received 284 letters of intent (LoI) to invest in IKN development projects from 21 countries.
The economic growth of Jakarta, the capital of Indonesia, has been a hot topic given that Jakarta’s economic growth can significantly affect the national economic growth.
Jakarta’s economic growth increased to 5.13 percent in the second quarter of this year, an increase of 0.18 percentage points from 4.95 percent growth in the first quarter.
Jakarta is believed to possess promising economic capital that can help retain the city’s status as a global-level business city after the planned relocation of Indonesia’s seat of government to the new capital Nusantara in East Kalimantan province.
