Analysis of the Level of Budget Readiness and Financing in Indonesia Removing the Nation’s Capital City

Literature Study

Abstract

The construction of the New State Capital (IKN) in East Kalimantan is predicted to spend a budget of Rp 466 trillion. In this case, the government ensures that 80% of the IKN development budget does not come from the APBN but from other schemes such as Government Cooperation with Business Entities (PPP), State-Owned Enterprises (BUMN), the private sector, and foreign investors. The purpose of this study was to assess the level of readiness of the five IKN financing schemes in order to fund IKN. This study develops three indicators to assess the level of readiness of the five IKN development budget schemes, namely indicators of value, growth, and concern for infrastructure. The research method used is qualitative research with a literature study approach. The data sources come from the 2012-2021 APBN realization report, the 2017-2021 PPP project cost estimate report, the realization of the value of domestic (PMDN) and foreign (PMA) investment 2012-2021, the net profit and capital expenditure report (infrastructure and non-infrastructure) of BUMN 2015-2021, and report on the market capitalization value of companies listed on the Indonesia Stock Exchange (IDX) 2012-2021. The results showed that of the five IKN financing schemes, 3 schemes were declared quite ready, namely the PPP scheme, the private sector, and foreign investment, while the APBN and BUMN schemes were declared less ready. Therefore, the government needs to develop strategies and regulations that can facilitate and accelerate PPP schemes, foreign investment, and the private sector in funding IKN.