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Japan for Jakarta-Surabaya high-speed train project
Nearly seven years into his presidency, Jokowi has navigated the country closer to China – he has prioritized diplomatic and economic relations with China and fostered personal relations with Chinese leader Xi Jinping.
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A worker inspects a tunnel-boring machine inside Tunnel 1 of the Jakarta-Bandung high speed railway project in Pondok Gede, Bekasi, West Java. The machine has completed the 1.8-kilometer tunnel located under the Jakarta-Cikampek toll road. JP/Wendra Ajistyatama (JP/Wendra Ajistyatama)
When meeting with new Japanese Prime Minister Fumio Kishida during the G20 summit on Oct. 30-31 in Rome, President Joko “Jokowi” Widodo will have a golden opportunity to win back the hearts of the Japanese people and to redirect bilateral relations with Japan.
Jokowi shocked Japan, including then prime minister Shinzo Abe, with his decision to award the Jakarta-Bandung high-speed train project to China in September 2015. At that time Japan was almost certain to win the contract and had even begun to project the extension of the rail track to Surabaya, the capital of East Java.
Japan offered to cover 75 percent of the cost in soft and long-term loans, an interest rate of just 0.1 percent and a borrowing term of 40 years, under a government-to-government scheme. Yet Jokowi insisted on a business-to-business scheme as he did not want to add burden to the state budget.
Japan’s rival China could accept the terms. However, it turned out later, the project was not purely a business-to-business affair. The government’s role was visible as a consortium of state-owned companies from China and Indonesia was awarded the contract.
As reported by The Jakarta Post, during a bilateral meeting on the sidelines of the East Asia Summit in Kuala Lumpur in November 2015, one month after the announcement of the tender winner of the railway project, Abe bluntly expressed his disappointment with Jokowi’s favoring of China, citing Japan’s superiority in terms of technology and financing. Abe emphasized the importance of “a relationship of trust and transparency in procedures” and called for “a shared understanding on these matters for future cooperation”.
Since then, Japan has become extra cautious in dealing with Jokowi’s commitments to bilateral cooperation. Diplomatically Japan is “traumatized” by the Indonesian government, although ties between the two countries remain strong and warm (at least on the surface).
Both Indonesia and Japan face a similar problem of “taking everything for granted”. Therefore, it will be beneficial for both sides if President Jokowi demonstrates his sincere intention to reinvigorate bilateral ties.
