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Commentary: Trawlers, bankers and engineers battle for Southeast Asia
The fault lines of discord in East Asia may center on the South China Sea, but the front lines of strategic preponderance in Southeast Asia could be won by innocuous fishing boats, suited financiers and railway engineers
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he fault lines of discord in East Asia may center on the South China Sea, but the front lines of strategic preponderance in Southeast Asia could be won by innocuous fishing boats, suited financiers and railway engineers.
Gone are the days of gunboat diplomacy and the zero-sum realists. These days, it's all about presence, influence and preponderance.
The South China Sea has seen a construction binge on symbolic middle-of-nowhere islets as a maritime militia of fishing boats supplant the need for frigates to show force.
The second phase of this 'war of attrition' has just begun emulating the modes of expansion of centuries past ' from the days of Cheng Ho, railway imperialism and the Allies of World War II.
Admiral Ho's 15th Century fleet established entrepôts and prestige for the Middle Kingdom.
Railways expanded 18th century European imperialism in Asia from seaports to the hinterland.
Allied victory in 1945 was founded on economic strength, innovation and logistics, as much as on tactics, courage and luck.
Japan last week threw down a gauntlet in a bid to check China's dominance in the construction of a new Asia.
Prime Minister Shinzo Abe's proposed two elements that directly challenged Chinese initiatives.
The first was to prop up the Asia Development Bank (ADB) and yen loans by providing US$110 billion over the next five years for Asian infrastructure investment. The move pits it directly against China's Asian Infrastructure Investment Bank (AIIB) and Beijing's bilateral pledges.
The second was to repeatedly emphasize that Asia needs 'quality infrastructure' that Japan can provide. A brief from the Japanese government included the term in almost every other sentence, along with examples like the Delhi Metro, the Nhat Tan Bridge in Vietnam and the Ulan Bator Railway Flyover.
It implied that infrastructure from other 'alternatives' was not on par with that of Japan's. The brief argued that while 'quality infrastructure' may appear expensive, its durability, ease of use and disaster-resilience ultimately made it cost effective.
'There is no room for cheap or subpar,' Abe said.
Key in this challenge will be the construction of high-speed railways, not only because they provide a base for connectivity in Asia, but also for the historic symbolism railways provide. Most Asian railway lines are derivatives of a colonial past.
China and Japan have upped the ante. Both are distinguished in financing and developing high speed railways.
Since the 1960s Japan was the recognized leader with its Shinkansen bullet train.
However, the last decade saw China become the high-speed railway center of the world with inexpensive technology adopted from Japanese partners and a network of more than 10,000 kilometers of lines.
As competition emerges between these two Asian powers, railway tracks are becoming the new battle lines.
The biggest envisioned project is the Kunming'Singapore Railway network connecting all countries of mainland Southeast Asia. While the business impact of the route is invaluable, the significance of making southwest China the hub for Southeast Asia is even more strategic.
The jewel will be the 350-km Kuala Lumpur-Singapore leg, which would be Southeast Asia's first truly high-speed railway line. Tenders are due to be completed by year's end and the China Railway Construction Corp. (CRCC) is the leading bidder.
The other bidders include Japan's JR East, Germany's Siemens AG and France's Alstom. The CRCC's bid is believed to cost least and have the quickest construction time.
Indonesia, too, is being wooed with this railway diplomacy. However, unlike its neighbors on the mainland, its geopolitics allows Indonesia to be cautious, but not fear being overrun or unduly influenced by regional powers.
It was no accident that during a visit to Japan and China in March President Joko 'Jokowi' Widodo travelled on a bullet train from Tokyo to Nagoya and a day later in China took the express train from the Beijing airport to the city center.
Both the President and Vice President Jusuf Kalla realize the opportunity at hand and have referred to getting the best out of it.
They also know full well that it is not simply a question of what is more cost efficient.
On the immediate horizon is the development of a 150-km Jakarta-Bandung high-speed railway.
Japan three years ago already began to study the project. However, China and Indonesia last month signed a memorandum that seems to have cemented a deal for a high-speed line provisionally costing $6.7 billion.
During Kalla's visit to Tokyo last week the Japanese prime minister repeatedly expressed keen interest in the Jakarta-Bandung line, despite being steered toward the more lucrative 600-km extension connecting Bandung to Surabaya.
It may also have been coincidence that Kalla's talks with Abe coincided with Japan's new 'quality infrastructure' initiative.
But so far Jakarta seems to be carefully hedging its bets in the railway wars.
Jakarta's massive MRT project is adopting the Standard Urban Railway System for Asia, which was developed to promote the export of Japanese systems to Asian countries.
Sumitomo Corp. and Nippon Sharyo, Ltd. in March were awarded a $90 million-plus contract by MRT Jakarta to supply subway cars for its North-South Line.
Some call it hedging, others say it's strategic balancing. The winners of the next round of tenders will be as much a political consideration as a technological or financial one.
Indonesia will likely have four prime considerations.
Value, defined by quality in relation to cost, will be the first. Does Indonesia really need an astronomically costly bullet train that speeds at over 300 kph, or will a less expensive 200 kph one suffice? Even at the lowest average pace these trains would nearly triple the speeds of current locomotives.
Second is financing. Japan has an advantage with its ability to provide better interest rates.
Third is the ratio of local to foreign content. How would this create jobs? How many foreign imports and how much foreign labor would be required?
The final element is technology transfer. Indonesia needs to steal a page from China's playbook when it emulated Japanese technology to develop China's first high-speed railway.
At the very least Indonesian engineers must maintain a standard of know-how to autonomously conduct maintenance and further develop the new line.
It will be another six months or so before the Jakarta-Bandung tender is finalized. Until then Indonesia has much to consider.
