The Jakarta Post
Transnational investment decisions often have substantial strategic geopolitical implications that are not mentioned in the accompanying glossy corporate documents supplied by the bidders.
The same phenomenon applies to the escalating contest between China and Japan over the tender to build Indonesia's first high-speed railway, which is estimated to cost US$4.4 billion to $5.5 billion.
Both China and Japan have engaged in a flurry of revised proposals and intense lobbying, particularly in recent weeks as the government draws closer to making a final decision on which proposal to accept.
There is a fundamental reason for the high level of assertiveness displayed by both Japan and China that goes well beyond just economics ' this contest is part of a much larger chess game the two Asian powerhouses are playing in pursuit of greater strategic influence within the Asia Pacific.
Much of the rhetoric in the public domain understandably focuses instead on the potential economic implications of the Jakarta-Bandung bullet train project. This somewhat narrow focus ignores the fact that, for Japan and China, there are much bigger stakes at play.
The respective campaigns by Japan and China to win the tender of such an iconic national project are really campaigns to attain a more direct engagement with, and greater influence over, Indonesia at the expense of the other country.
This contest is just one of the latest developments in a series of measures taken within the Asia Pacific by Japan and China in the pursuit of 'soft power'. One of the clearest examples of China's search for greater 'soft power' is the establishment of the Asian Infrastructure Investment Bank (AIIB), expected to have a capitalization of around $100 billion in the future.
More than 50 countries, including Indonesia, have signed up to the AIIB, where China continues to enjoy the largest voting share. The Beijing-based AIIB will likely enhance the depth and scope of China's influence within the Asia Pacific and consequently is seen by many as a conduit for China's aspirations of becoming the next Asian hegemon.
In the case of Japan, it has endeavored to exert 'soft power' by building security ties with the Philippines and Vietnam, both of which are ASEAN members that are embroiled in ongoing disputes with China over territory in the South China Sea.
These security ties have included the supply of maritime patrol boats by Japan to Vietnam and the Philippines respectively, with naval exercises between the latter and Japan held this year.
Compounding the complexity of this broader geopolitical game are the domestic issues faced by both China and Japan that tend to spill over into foreign policy.
For China, emerging economic challenges and the ongoing need to fortify support for the Communist Party have led to an enduring quest for global influence that caters to domestic sentiment. Nothing distracts from domestic issues better than being able to point to the enhanced stature of one's nation on the world stage, while highlighting real and perceived threats that emanate from rival nation states.
In the case of Japan, conflict between Japan's militarist past and recent pacifist ideologies have led to questions of national identity. This uncertainly has given birth to, and will likely continue to manifest in, a more multi-faceted Japanese approach toward 'making friends and influencing people'.
In previous decades, Japan believed that its international trade ties with its neighbors and the strategic support it enjoyed from the United States were sufficient to ensure its regional clout.
This era has passed, thanks to the ever increasing prominence of China. As argued by prominent strategic studies and defense policy expert Hugh White, Japan faces a binary choice: It either accepts Chinese primacy within the Asia Pacific, or Japan will need to seek to preserve its full political and strategic independence.
Within this context of strategic jostling between China and Japan, ostensibly commercial matters such as foreign investment and infrastructure development contracts are often thin veneers that hide the much more complex agenda discussed above.
The challenge for Indonesia is to acknowledge this reality and recognize that, even if the tender for the Jakarta-Bandung high-speed rail is awarded solely according to economic and technical merit, the selection of China over Japan or vice versa will have political implications at the Asia-Pacific level.
In the past, Indonesia has occasionally been accused of not showing adequate leadership on certain sensitive regional matters such as the South China Sea dispute, despite Indonesia being the largest member of ASEAN. In contrast, non-ASEAN member Japan has managed to indirectly insert itself into the issue by supporting Vietnam and the Philippines.
Indonesia has been able to keep a lower profile during tensions between China and certain ASEAN members because of its position as the ASEAN country that is geographically farthest from China, as well as having little or no claim to the disputed region of the South China Sea.
However, with the imminent allocation of the Jakarta-Bandung high-speed rail project to China or Japan, Indonesia can no longer claim to be a distant third party to some of the key power plays within the region, nor a mere observer of the strategic tussle between China and Japan.
Instead, Indonesia will be an increasingly important piece of this delicate game of chess.
The writer spent several years working in the field of regional security analysis.
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