WHEN CHINA’S President Xi Jinping launched the Belt and Road initiative (BIS) in 2013, Indonesia was considered essential to its success. So much so that he went to Jakarta, its capital, to launch the maritime dimension of its global infrastructure investment program. But something funny happened: very little. Neighboring Cambodia has been overwhelmed by Chinese involvement in its economy and politics. In Pakistan BIS and its local iteration, the Sino-Pakistan Economic Corridor (CPEC), are presented as evidence of a relationship “as close as lips and teeth” – even CPEC comes out of the rails. In contrast, most Indonesians have never heard of China’s foreign policy. Banyan’s recent informal survey of Jakarta residents was almost unanimous: BIS is a financial institution, Bank Rakyat Indonesia.
China’s involvement in Indonesia is growing, but it has lagged. One reason is the long and slow process of starting any project. Public consultations drag on, the earth is a nightmare to acquire, bureaucrats block licenses, and the most cowardly ministers wonder what it has in store for them. Minister of President Joko Widodo, or Jokowi, admits that the Indonesian path is hardly ideal, but at least the country has avoided many of the reckless and grandiose projects and the poor financial conditions adopted by the rapidly moving neighboring countries . The only real albatross, a high-speed train planned from Jakarta to Bandung, is a cautionary tale. In 2015, China beat Japan in supply for its construction by not insisting on government guarantees for its loans. Quickly, the usual problems appeared: even the air force, with a base in the path of the train, opposed. Last year, all the land was finally acquired. But the project is years behind schedule and over budget. Since no wider high-speed network is envisaged which offers economies of scale, the 150 km line will never be profitable. The railroad is China’s flagship project in Indonesia, but Indonesian ministers don’t want to talk about it.
The railroad is also a lesson in the sometimes ugly sensitivity of the nearly 3 million Indonesians of Chinese descent, who in turn shape Indonesia’s engagement with China. The Chinese have been doing business in Indonesia for centuries and today form a large part of the entrepreneurial class. Anti-Chinese antagonisms go back at least to colonial times, when the Dutch appointed ethnic Chinese as fiscal farmers, while occasionally encouraging pogroms against Chinese sugar merchants, builders and workers. In the 20th century, some Indonesian nationalists defined themselves in part by their anti-Chinese. After independence, hatred exploded in 1965 following an alleged attempted coup on the left. Many ethnic Chinese were considered communist sympathizers. Chinese Indonesians were among those targeted by the army-led massacres, in which hundreds of thousands of people died. Anti-Chinese riots break out from time to time in the archipelago. And in 2017, the ethno-Chinese and Christian governor of Jakarta, Basuki Tjahaja Purnama, or Ahok, an ally of Jokowi, was imprisoned on false accusations of blasphemy. An exasperating politician, Prabowo Subianto, who said that Ahok should “know his place for fear that the Indonesian Chinese will suffer the consequences of his action”, is now the Minister of Defense.
The railway has also been criticized, caught in a broad wave of anti-Chinese sentiment. The government has drawn its own conclusions. All the other big projects supported by China must be built far from the Javanese heart where, explains an official, “many religious conservatives and Muslim radicals are gathered”. They include an oil refinery in north Sumatra near the Straits of Malacca, a smelter in Sulawesi which allows Indonesia to process its nickel ore for the first time, and hydroelectric plants planned in north Kalimantan to encourage aluminum foundries to leave China.
Indonesia therefore mainly engages with China on its own terms – and a Chinese engagement for a training college to teach Indonesians how to treat nickel is further proof. At times, it will even be considered resistant to China, as in a maritime spat last month in which the navy and coast guards expelled a Chinese fishing fleet from the exclusive economic zone of Indonesia. The move has led some observers to imagine that Indonesia would unite its neighbors in Southeast Asia against China in the South China Sea. But it is wishful thinking. Jokowi must appear robust to the anti-Chinese forces at home. But, for the economy to develop, it has to woo Chinese money.
This article appeared in the Asia section of the print edition under the title “Belt and roadblock”