Wed, Apr 03, 2019 - Page 9 News List

Indonesia might be next country to spurn China in election

By Karlis Salna and Arys Aditya  /  Bloomberg

Across vast tea plantations that sit atop the rolling hills separating two of Indonesia’s largest cities, excavators dig out a series of giant tunnels for the country’s first high-speed rail line.

The US$6 billion project linking the capital, Jakarta, with Bandung, about 150km away, is expected to cut the travel time between them to about 40 minutes. The journey now takes about four hours on a road clogged with trucks packed to the brim, and it can easily double when the wet season brings daily downpours.

In theory, the project should be a point of pride for Indonesian President Joko Widodo, the man popularly known as Jokowi who holds a commanding lead heading into an April 17 election, but it has been hampered by delays, and even members of his own administration have raised concerns over the transparency of its financial backer: China.

“The Jakarta-Bandung high-speed train represents everything that’s wrong with Belt and Road,” Indonesian Investment Coordinating Board Chairman Tom Lembong said in an interview last month, adding that he still remains a supporter of Chinese President Xi Jinping’s ( 習近平) ambitious plan to finance global infrastructure.

“It’s opaque and non-transparent — even us Cabinet members are having trouble getting data and information,” Lembong said.

While he does not doubt that the populous area can sustain a network of high-speed rail lines over the next few decades, he called the project “deeply troubled” and lamented the lack of financial modeling or due diligence.

Those sentiments are shared by Prabowo Subianto, who is challenging Jokowi for the presidency. To make up ground in the polls, the former general known by his first name is in part tapping into anti-China sentiment that has a long and occasionally ugly history in Indonesia — and has recently swept across Asia.

Last year, Malaysian Prime Minister Mahathir Mohamad stormed to power after promising to review Chinese investments, including a high-speed rail line. Myanmar has reassessed the price tag of a China-backed port, while Thailand’s opposition plans to review Chinese investments if it takes power after a disputed election this month. Tiny Maldives also booted a pro-China administration in a shift toward India.

Prabowo has said he welcomes Chinese investment, but it must also benefit Indonesia. He has vowed to review the high-speed rail project, and also to get a fairer deal in trade with Beijing.

Indonesia’s trade deficit with China surged to US$18.4 billion last year, up from about 40 percent since Jokowi came to power in 2014.

China has presented a dilemma for Jokowi from early in his presidency. On the one hand, stronger ties with Beijing and billions of dollars of cheap financing help him bring jobs and overcome a shortfall of government revenue. At the same time, it risks fueling impressions that Indonesia is becoming too indebted to China, leaving him open to political attacks.

“Jokowi has been very careful not to criticize China in most circumstances,” said Aaron Connelly, a Singapore-based research fellow at the Institute for International and Strategic Studies. “He is caught between a rock and hard place.”

Some Chinese investment in Indonesia is driven by economics, such as nickel mining in Sulawesi, but the high-speed rail project turned into a bidding war between China and Japan, Connelly said.

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