Indonesian President’s UAE deal secures financial center for new capital
- Indonesian President Joko Widodo secured a deal to involve Dubai’s financial hub in the Nusantara project.
- The MoU between Dubai International Financial Centre and Nusantara Capital City Authority.
- The move to relocate the capital from Jakarta to Borneo Island is seen as a bid to seal President Widodo’s legacy.
During his two-day working visit to the UAE, Indonesian President Joko Widodo secured a deal to involve Dubai’s financial hub in the Nusantara project, according to his office. Hosted by the Gulf state’s president, Sheikh Mohamed bin Zayed Al-Nahyan, Widodo arrived in the UAE on Tuesday.
The two countries agreed to “significant bilateral cooperation in various sectors,” Indonesia’s Cabinet Secretariat said in a statement, as it listed eight agreements signed during the trip, including in the areas of renewable energy, tourism ecosystems, payments systems, and the “MoU (memorandum of understanding) between the international financial hub Dubai International Financial Centre Authority and the Nusantara National Capital Authority.”
Southeast Asia’s largest economy is relocating its capital to Borneo Island to replace the overcrowded and sinking Jakarta on Java Island. The $33 billion megaproject, scheduled for completion in 2045, is expected to rely mostly on private investors, with the government planning to cover 20 percent of the total expenditure.
“In the field of strategic investment, the UEA’s contribution is increasingly significant in the development of the Indonesian Capital City,” Widodo said on X.
While construction works are underway and the central government plans to begin operations in the new city in 2024, the new capital has initiated work on its financial center area. Earlier this year, Indonesia’s largest state-owned banks — Bank Mandiri, Bank Rakyat Indonesia, and Bank Negara Indonesia — broke ground on their new corporate offices within the 260-hectare financial center, located in the city’s broader business district.
According to the UAE state news agency, DIFC governor Essa Kazim stated that through the MoU between Dubai International Financial Centre and Nusantara Capital City Authority, Indonesia and the UAE are “forming a new framework to ultimately grow the two financial ecosystems.”
“As the UAE and Indonesia collaborate and innovate to drive economic growth and social impact in both countries, DIFC as MEASA’s (the Middle East, Africa, and Southern Asia) global leading financial center, is perfectly positioned to facilitate significant opportunities by way of this strategic partnership,” he said.
President Widodo launched the ambitious move to relocate the capital from Jakarta about 2,000 km away in the middle of a forest as a flagship project in 2019. The first phase of construction, scheduled for completion in 2024, is widely seen as the president’s attempt to seal his legacy before the end of his second and final term in office in October this year.
During the UAE trip, Sheikh Mohamed presented Widodo with the Order of Zayed for his efforts in strengthening UAE-Indonesian relations. The UAE bestows the order, the highest civilian honor in the country, upon leaders and heads of state. During Widodo’s second term, the countries signed a Comprehensive Economic Partnership Agreement in July 2022 — Indonesia’s first free trade deal with a Middle Eastern country.
“Building upon the close and enduring ties between the UAE and Indonesia, we explored opportunities to further expand our economic partnership,” Sheikh Mohamed said on X.
“I extend my sincere thanks to President Widodo for his tireless efforts during his time in office to strengthen the bonds between our two nations.”
