INDONESIA’S President Joko Widodo is a man in a hurry. Accompanied by a vast retinue of cabinet ministers, his chef, and 100 chief executives he has travelled to the heart of Borneo’s rainforest to oversee his audacious plan to build a new capital there.

In 38-degree heat, Jokowi, as he is widely known, throws himself into a frenetic schedule of “groundbreaking” ceremonies in clearings in the jungle — for an airport, a school, two hospitals, a hotel and shopping mall, as well as the new headquarters of Indonesia’s central bank.

It is four years since he ratified his $32bn dream to move the government from the overcrowded and sinking megalopolis that is the current capital Jakarta to this equatorial outpost in Kalimantan. Even by the colossal standards of Asia’s infrastructure projects this has a staggering ambition and cost. Now, Widodo is racing against time to see it come into being before he steps down next year.

“This palace will be green, green, green,” he enthuses as he gives a tour of the half-built brassclad presidential residence. In the shape of Indonesia’s mythical Garuda bird, it has outstretched wings and a commanding view of the capital Nusantara, which means archipelago in Indonesian. The palace-to-be is “51 per cent” complete ahead of next August’s deadline, he says, surveying a sea of bulldozers and cranes.

He brushes aside doubts that people may not want to move there; to get there from Jakarta requires a two-hour plane ride and then a bumpy two hours in a car. “They will come. Compare it to Jakarta where there are floods, pollution and traffic jams,” Widodo says. “The young, they will love it. It will be zero-carbon.”

With that, he heads off to inspect a garden nursery stretching as far as the eye can see. Just two months old, it has 150 gardeners tending 4mn seedlings. “Soon we will have 16mn,” he says, reeling off a blizzard of data. “That means more or less 160,000 hectares we can turn green.”

To his critics, the president’s new capital is an expensive vanity project. He argues it is a chance to transform the economic geography of the country. In risk and ambition, it neatly echoes Indonesia’s own challenges and opportunities as the Widodo era ends.

The president’s departure next year after a decade in power comes as this giant democracy of 270mn people faces big questions over its trajectory. Widodo has stratospheric approval ratings, close to 80 per cent in recent polls, reflecting his steady record in handling the economy and an increasingly fraught geopolitical scene.

Since his first election victory in 2014, with the exception of the pandemic era, GDP has grown at about 5 per cent a year. As the relationship between Washington and Beijing has soured, he has steered a canny middle course. Bolstering his position has been Indonesia’s bedrock; it is the world’s largest producer of nickel, the coveted critical mineral underpinning new technologies such as electric vehicles and batteries.

So could this at last be a moment of lift-off, investors ask? Should Indonesia not be able to emulate other south-east Asian countries in growing at 7 per cent, enabling it to one day claim a place as one of the world’s top five economies?

“Indonesia’s combination of internal domestic market and natural resources is such that if we do get the human capital and education part right, I believe it will be hard for any country to compete with us,” says tech entrepreneur Nadiem Makarim, who is Widodo’s education minister.

Or is Indonesia destined to disappoint economically as it has so often before?

Widodo has delivered on promises such as infrastructure and trade, says Evan Laksmana, senior fellow at the International Institute for Strategic Studies (IISS) in Singapore. But, he adds, to attract more international investment the president needs to do more to take on vested interests in business and to reform the bureaucracy.

“A lot of experts and economists believe Indonesia could and should be growing at more than 5 per cent,” he says, but “I am not sure it can be a top five economy by 2045.”

Sidestepping US-China rivalry

If there are two words that have defined Widodo’s presidency they are infrastructure and nickel. When he took office, demand for Indonesia’s bountiful commodities had slackened against a global downturn, its infrastructure was underfunded and enthusiasm from international investors for the world’s thirdlargest democracy was weak.

The one-time city mayor set to work. Widodo points to the highways he has built, the airports that have sprung up in remote regions and the boom in new dams, seen as essential at a time when climate change has led to drought in large parts of the country. “Before, we had 240 dams, now we have 301,” he beams.

But it is his second term, starting in 2019, which has seen the most ambitious economic policies, in particular the creation of a domestic electric vehicle and battery supply chain. By banning the export of nickel ore in 2020, Widodo forced companies such as China’s Tsingshan, South Korea’s LG and Brazil’s Vale to set up more local factories if they wanted access to Indonesia’s abundant reserves. These factories were not only to refine nickel but also to entice more companies to build more of their supply chains in Indonesia.

Defying a ruling by the World Trade Organization that the ban was unfair, Widodo has stuck to his policy and it has paid off. Indonesia’s exports, boosted by soaring commodity prices, hit a high of $292bn in 2022 though they have moderated this year as China’s economy slows.

Yet for all his diplomacy, Widodo’s record on foreign direct investment is mixed. Indonesia has struggled to compete with Vietnam and India for the manufacturing shift away from China. International dollars have largely gone to the mining sector instead of hightech manufacturing or other areas.

“Before politics Widodo managed factories. He keeps the costs down, the people happy and gets the product out. It’s not a bad approach and he is good at that, but it is not enough,” says Kevin O’Rourke, an analyst at consultancy Reformasi Information Services, adding that foreign