Finance Minister Says IKN Is Too Quiet, Bali Emerges as Strong Contender for Indonesia’s International Financial Center

JAKARTA – The Indonesian government is continuing discussions on the establishment of an International Financial Center (IFC) as part of its broader strategy to strengthen the country’s position as a global investment destination. Finance Minister Purbaya Yudhi Sadewa indicated that the new capital city, Nusantara (IKN) in East Kalimantan, is unlikely to become the location for the planned financial hub.

Speaking at the House of Representatives complex in Senayan, Jakarta, on Thursday (July 2, 2026), Purbaya said IKN’s current condition is not yet suitable to support an international financial center.

“Probably not. It’s too quiet,” Purbaya said when asked whether IKN could host the project.

According to the minister, the government is still evaluating several potential locations that offer strong infrastructure, accessibility, and an attractive business environment for global investors. Among the leading alternatives under consideration is Bali.

“We’re still discussing it. Bali is one of the alternatives, although there are several other locations being considered as well,” he said.

Purbaya emphasized that the government will ultimately select a location capable of providing a comfortable and competitive environment for international investors and financial institutions.

“What matters is that we find the most comfortable place for international investors,” he added.

The proposal to establish a Special Financial Center was first outlined by President Prabowo Subianto, who said the initiative is intended to reinforce Indonesia’s appeal as a safe and stable investment destination amid ongoing geopolitical uncertainties.

Speaking during a cabinet briefing at the Presidential Palace in Jakarta on April 8, 2026, Prabowo said the government was actively searching for the most suitable location.

“We are planning to establish a Special Financial Center. We are currently looking for the right place,” the President said.

Prabowo noted that the concept had originally been proposed several years ago by Luhut Binsar Pandjaitan, who suggested Bali as a potential location due to its international reputation and favorable ecosystem for global business and finance.

The President argued that rising geopolitical tensions have created new opportunities for Indonesia to attract international capital. He pointed out that investors are increasingly seeking politically stable countries with strong economic prospects.

Prabowo also highlighted Bali’s growing international appeal, noting that many foreign nationals, including citizens of Russia and Ukraine, have chosen to relocate to the island since the conflict between the two countries began in 2022.

In addition, he said escalating tensions in the Middle East could encourage investors to redirect capital toward more stable destinations such as Indonesia.

“Money that was previously headed to the Middle East is now looking for another destination. Which countries are not at war today? Indonesia is one of the most attractive options,” Prabowo said.

The government has yet to announce the final location for the International Financial Center. Officials said the decision will be based on several factors, including infrastructure readiness, connectivity, regulatory certainty, and the overall attractiveness of the location for international investors and financial institutions.