SoftBank Group Corp recently pulled out of financing Indonesia’s mega-project to construct a new capital city on the island of Borneo.Indonesia is turning to Saudi Arabia and the United Arab Emirates, as well as crowdfunding from its massive population, to develop its new capital city in Borneo after Japanese tech behemoth SoftBank Group pulled out of the US$34 billion project .
Citing his boss Masayoshi Son, Miyauchi said SoftBank will shift money previously allocated for Nusantara to "provincial-level developments in Indonesia, for example to West Sumatra, whose potentials we are still exploring". "When I visited Saudi Arabia, Crown Prince Mohammad bin Salman asked to get into [the capital development project]. We are still discussing how big [Saudi Arabia's] investments will be. We are continuing to have virtual meetings with his team," Luhut told reporters recently.
The country is accustomed to crowdfunding when it comes to social projects or financing small and medium enterprises, but not for a government-backed mega project like building a new capital city from scratch, said Azyumardi Azra, one of Indonesia's most prominent Muslim scholars with Syarif Hidayatullah State Islamic University in Jakarta.
A street vendor sells papers with the news of Indonesia’s New Capital Nusantara on its headline, in Jakarta in March. PHOTO: Reuters Saudi Arabia's investments in Indonesia have been on a downward trend in the past decade - totalling US$3.6 million last year, compared to US$30.4 million in 2015. During a recent visit to Abu Dhabi, Widodo also secured an investment commitment of US$44.6 billion from several UAE companies.Asked if there is a path for the UAE to use its planned investment in the new capital as leverage in getting Jakarta to normalise ties with Israel - as Abu Dhabi did in August 2020 - Azyumardi from State Islamic University said that funding the Nusantara construction alone will not be enough to push Indonesia to establish a diplomatic relationship with Israel.