As China moves to roll out its titanic Belt and Road initiative across the globe, what began as a triumphant endeavor is becoming a protracted nightmare in Indonesia. This strategic initiative developed in partnership with various countries in the Southeast Asia region seeks to leverage China’s political capital by injecting its vast new wealth into development projects with a seemingly altruistic goal of regional cooperation.
The Indonesian iteration of the initiative, an assortment of projects of various scales, enjoys support in Jakarta and among the country’s financial elite. However, many Indonesians remain unconvinced, leading to the temporary derailing of major projects such as the Jakarta-Bandung high-speed rail amid mass protests, critical media coverage, and negative public opinion embedded in an unfavorable social and cultural context.
Given the hulking nature of an $8 trillion global infrastructure scheme, Beijing should expect to encounter resistance when embarking on such bold and far-reaching ambitions, and nowhere is a better case study than Indonesia in testing Beijing’s adaptability and resolve in the face of local conditions on the ground. Vital to unlocking the challenge faced is understanding the complex and, frankly, hostile political climate, where central approval in Jakarta by no means guarantees success.
Indonesia’s myriad local governments and grassroots community movements have for the past five years proved no easy obstacle to overcome, with fierce resistance plaguing the Jakarta-Bandung rail every step of the way. Protests have flared up with locals condemning the $5.5 billion joint-venture project for its lack of community consultation, the threat of widespread dispossession, and economic dislocation for urban and rural poor.
Proponents of the project argue that this foreign capital via the Belt and Road is a lightning rod to deliver urgently needed critical infrastructure and ignite economic development, all with the noble goal of lifting Indonesia from the dreaded middle-income trap. Better yet, it appears that Jakarta has maintained the upper hand in these negotiations, having successfully played competing bids from Japan and China against each other in a show of pageantry. This contest, all while steering both bids into strict terms demanding that local labor and materials be utilized, was viewed favorably in Jakarta as a display of crafty diplomatic negotiation delivering on a gleaming political public relations fantasy.
On the one hand, Tokyo has successfully maintained a strong presence in Indonesian foreign investment planning and projects for decades; its development strategists are well acquainted with local cultural norms and there is a track record of project delivery, productive collaboration and cordial relations with local labor. On the other hand, while Chinese organizations are new to the playing field and face a level of public mistrust, their cost competitiveness promises cheaper, quicker delivery with technological and skills transfers. Most convincingly, the high-speed rail project absolved Jakarta of all responsibility for its funding and underwriting.
The project’s commencement began with all the usual pomp, ceremony and optimism within the Chinese-Indonesian consortium PT Kereta Cepat Indonesia China, or KCIC, exhibiting a sense of naivete of what was yet to come. Political leaders and elites in both countries, thrilled with the ground-breaking moment for the project in January 2016, touted the drastically reduced commute between Indonesia’s booming megacity capital and its third-largest city, along with more than 30,000 estimated new local jobs and resultant economic boon.
China, pleased in winning a challenging bid against long-standing rival Japan, was also well on its way to become the second-largest foreign investor in Indonesia, overtaking its East Asian competitor and trailing only Singapore in a position claimed by 2019. This grandiose Chinese-led rail venture was assured to be a symbol of China’s Belt and Road success. On the ground, however, resistance was stirring.
Indonesia, as complex as any society, is not a vacuum. It presents a throng of unique social conditions and a deep historical context not lightly swayed by shining displays of capital investment from ambitious partners in Beijing. Rising anti-China sentiment is rooted in recent naval skirmishes near Indonesia’s Natuna Islands, its perceived economic and militaristic dominance in the Asia-Pacific region, as well as prejudice towards ethnic Chinese Indonesians, viewed as wealthy and privileged by many. These factors have coalesced to foment a hostile media landscape and tendency for many to view, rightly or not, all Chinese capital and labor as a threat to the economic conditions of locals, and to Indonesia’s sovereignty.
The geopolitical upheaval presented by China’s rise has many countries in the region, including Indonesia, feeling uneasy as the Middle Kingdom emerges from its “century of humiliation.”
These concerns are not all without merit, however. The geopolitical upheaval presented by China’s rise has many countries in the region, including Indonesia, feeling uneasy as the Middle Kingdom emerges from its “century of humiliation.” While there is nothing nefarious to point to regarding the Belt and Road yet, many commentators across the region and the ideological spectrum agree that there is a strategic geopolitical agenda at play. This has many concerned about the future geopolitical order and Indonesia’s place in it, with Prabowo, the ultranationalist politician and now defense minister, harnessing this widespread angst as a central tenet of his 2019 presidential election campaign.
A culmination of widespread community and environmental discontent in Indonesia continues to hamper the viability of major Belt and Road projects across the country. Completion of the $1.5 billion Bating Toru hydropower plant in North Sumatra Province has been delayed by at least three years due to a combination of pandemic travel restrictions placed on Chinese labor entering the country and fierce opposition by environmental activists.
The worst of the issues is the potential harm to the critically endangered Tapaculo orangutan whose habitat is threatened by the flooding of the surrounding rainforest. Similar environmental considerations have beset the Java high-speed rail project amid fears of landslides, degradation of nearby water supplies and seismological safety concerns. Hardly a rosy scenario for backers of the Belt and Road, or the ordinary citizens.
Further adding salt to the wounds is anger over rampant economic inequality in Indonesia, compounding local resistance to the rail project. In the wake of the 2019 presidential election, Jakarta was rocked by large-scale protests that turned violent, a mark of the frustration among the young and working-class toward a government generally apathetic to their plight. (The riots were, it is generally agreed, orchestrated by supporters of Prabowo against President Joko Widodo, who won re-election.) In this context, such a project is largely seen to only benefit the privileged classes, while dispossessing many low-skilled rural poor living in the acquisition areas who now face uncertain futures away from their farmlands. It is little wonder then, that the process of land acquisition has been glacial and community organization has ground operations to a virtual standstill, triggering embarrassment, ballooning costs and triggering global commentary on its failure to launch.
While the terrain is steep for China, it does have an opportunity to exact a huge diplomatic prize via its Belt and Road ambitions but only if it spends considerable time and resources improving its ground game and establishing trust among the Indonesian people as has been achieved by Japan. With such ostentatious projects aimed at satisfying Jakarta’s financial elite, and President Joko’s contentious infrastructure agenda fanning political flames, Beijing might be wary about future endeavors in the country.