Indonesia’s Capital Relocation to Nusantara: Strategic Implications for Malaysia’s Bilateral Relations, Security and Economic Interests

Indonesia’s relocation of its national capital to Nusantara in East Kalimantan changes the spatial context of Malaysia–Indonesia relations on Borneo. This qualitative study combines documentary analysis with eight elite semi-structured interviews conducted in Malaysia and Indonesia. Three findings emerge. First, Nusantara does not create an immediate conventional military threat to Malaysia, but it increases the strategic salience of land-border management, maritime boundary diplomacy and non-traditional security coordination. Second, benefits for Sabah and Sarawak are conditional on deliberate integration into BIMP-EAGA logistics, energy and investment networks rather than automatic spillovers. Third, cyber, migration, environmental and community pressures are better treated as projected or conditional risks unless supported by documented developments. The article applies Regional Security Complex Theory as its principal lens, supported by national security and national defence concepts, and proposes targeted bilateral mechanisms that match the identified institutional gaps.