Resource Dependency, Regional Inequality, and Sustainable Development in East Kalimantan: Evidence from Indonesia's New Capital Region

ABSTRACT: This study examines the intricate relationship between resource dependency, regional inequality, and sustainable development in East Kalimantan following Indonesia's decision to relocate its capital to Nusantara. Employing qualitative methodology through document analysis, semi-structured elite interviews, and comparative case examination, this research investigates how decades of extractive industries have shaped regional disparities and whether the new capital initiative can catalyze sustainable transformation. Empirical evidence from 2023–2025 reveals paradoxical outcomes: while East Kalimantan contributes substantially to national revenue through coal and palm oil exports, regional development indicators demonstrate persistent inequality, with Gini coefficients ranging from 0.38 to 0.42 across districts. Infrastructure investment surged 340% between 2022 and 2024, yet benefits concentrate in Penajam Paser Utara and Kutai Kartanegara, leaving resource-rich peripheral districts underserved. Analysis demonstrates that resource curse mechanisms—including Dutch disease effects, institutional weaknesses, and rent-seeking behaviors—continue undermining equitable development despite massive capital flows. The study identifies critical pathways toward sustainable transformation: diversification beyond extractive sectors, strengthening local governance capacity, implementing benefit-sharing mechanisms, and integrating environmental safeguards into regional planning. Findings contribute to theoretical debates on resource-dependent development and offer practical implications for emerging economies navigating similar transitions. The research underscores that without deliberate policy interventions addressing structural inequalities, infrastructure-led development risks replicating rather than resolving historical imbalances.