In 2015, when President Joko “Jokowi” Widodo unveiled an ambitious plan to build the roads, ports and railways desperately needed to advance Indonesia’s economy, he realized that he could not rely on domestic funds alone for the targeted US$465 billion of investment by 2019. Back then, Chinese investment to Indonesia was low, lagging behind even Malaysia.

But within five years, China went from being a peripheral investor in the Indonesian economy to Indonesia’s third-largest investor. Four years later, $10.2 billion of the initial investment goal has been contributed by Chinese investors.

While Jokowi was preparing for economic revitalization, Chinese President Xi Jinping was courting governments across Asia to join his flagship Belt and Road Initiative (BRI).

Whether the significant leap in Chinese investment in Indonesia since 2016 can be directly linked to the BRI is a controversial question complicated by the cautious attitude Indonesia has taken toward the initiative.

Has the Belt and Road Initiative in Indonesia even begun?

The term “Belt and Road” has become ubiquitous among governments and experts in Asia, but while everyone knows what it is, no one can tell you what is in it. There is no official list of projects in this elusive BRI, although China might finally be doing so. According to an April 3 report from Bloomberg, China is for the first time drafting criteria for projects to be considered part of the initiative.

While projects across Indonesia, from dams in North Sumatra to the Jakarta-Bandung high-speed railway, have had Chinese funds backing them since 2015 and before, whether they are Belt and Road projects depends largely on who you ask.

Western media and observers and Chinese media are two groups keen to tag any project with Chinese investment or the involvement of Chinese state-owned companies as BRI projects, albeit for different reasons.

A July 3 Reuters article labeled a hydropower project in the Batang Toru rainforest funded by Chinese banks and built by Chinese state-owned firm Sinohydro as a BRI project.

And the Chinese Communist Party-owned newspaper China Daily referred to the Jakarta-Bandung high-speed railway as one of the “amazing” projects being built under the initiative in an advertisement that appeared in British newspaper The Telegraph in May.

Such labels are not only inaccurate but premature, as it was not until the second Belt and Road Forum in Beijing on April 25 this year that Indonesia announced projects it proposed for BRI investment.

“Actually, until today, there is [not] yet [any] program under the Belt and Road Initiative [that] is done or started in Indonesia, although we are offering [China] to invest in North Sumatra, North Kalimantan, North Sulawesi and Bali,” Atmadji Sumarkidjo, an expert staffer for the coordinating maritime affairs minister, told The Jakarta Post. The Office of the Coordinating Maritime Affairs Minister is the government body behind the April agreement on BRI projects with China, with its minister, Luhut Pandjaitan, in charge of all Chinese investment in Indonesia.

From the Indonesian government’s point of view, a project is not a BRI project until they call it one.

“There is a misperception on what constitutes the BRI, especially between Indonesia and China,” said Yose Rizal Damuri, chief economist at the Center for Strategic and International Studies, a Jakarta-based think tank. “For example, the high-speed railway project between Jakarta and Bandung [is] always represented as a BRI project, while it is not actually. Indonesia and China actually [have] not really begun BRI development.”

Meanwhile, North Sumatra Hydro Energy (NSHE), the Indonesian company developing the Batang Toru plant, has made clear that the project is not to be considered part of the Belt and Road program.

“The Batang Toru Hydro Energy Power Plant is not part of the Belt and Road Initiative of the Chinese Government. The PLTA Batang Toru is part of [the] national project and NSHE as the developer is [a] national company,” Agus Djoko Ismanto, senior adviser on environment and sustainability at North Sumatra Hydro Energy told the Post in a written statement.

Ridwan Jamaluddin, deputy for infrastructure coordination at the Office of the Coordinating Maritime Affairs Minister, echoed that stance, stating in a recent interview with the Post that the dam was not on the list of BRI projects in Indonesia.

What projects are considered BRI projects?

At the second Belt and Road Forum in Beijing in April this year, Indonesia and China agreed upon a plan to develop “Regional Comprehensive Economic Development Corridors”. Indonesia proposed 30 projects worth US$91.1billion for Chinese “Belt and Road” investment. Indonesia and China also agreed to collaborate on higher education, research, innovation, and vocational training.

The vast majority of the projects fall within four economic corridors located in regions that are underinvested in. To redistribute the spoils of economic growth, the government designated four corridors in North Sumatra, North Kalimantan, North Sulawesi and Bali for Chinese investment.

Economic growth and investment in Indonesia are concentrated in Java and to a lesser degree Sumatra, with the two islands gobbling up almost three-quarters of total foreign investment in Indonesia in 2018, according to Investment Coordinating Board data.

But the list of 30 projects is still being finalized, although at least 19 have been confirmed, according to Atmadji.

Exercising caution

The ambiguity surrounding the definition of Belt and Road projects in Indonesia is emblematic of the somewhat cautious attitude the Indonesian government has taken toward Xi’s signature initiative.

Even though the Belt and Road Initiative was first announced in Indonesia during Xi’s speech at the Indonesian House of Representatives in October 2013, Indonesia has been relatively slow in openly embracing the initiative.

“Indonesia tends to be more cautious because of the domestic politics, as well, perhaps you know that the Jokowi Administration’s closeness with China has been criticized a lot,” said Yose. Political smear campaigns alleging that Jokowi had a Chinese grandfather and the blasphemy trial of former Jakarta governor Basuki Tjahaja Purnama are two recent flashpoints that show racism is still alive in the political arena.

Anti-Chinese sentiment in Indonesia is not a new phenomenon, but it has acquired a new xenophobic undertone since Chinese investment — and the Chinese workers that accompany it — began increasing in 2016.

“[The government] has been cautious [of] the sentiment on China. [...] There has always been sentiment against ethnic-Chinese Indonesians, and with [Chinese] investment, there has been a surge of Chinese workers in Indonesia, so the people have been complaining about it,” said Tiola, an Indonesia analyst at the Singapore-based S. Rajaratnam School of International Studies (RSIS), citing as an example the derogatory term aseng used to refer to Chinese people, particularly foreigners working for Chinese corporations.

But Indonesia also had economic reasons to be wary of jumping aboard the BRI without first negotiating favorable terms. In other Asian countries, BRI projects have gone south, plagued by expensive loans that pushed some countries into debt crises or to reject projects.

In October 2018, Indonesia and China finally agreed upon the terms of cooperation under which the Belt and Road would roll out in Indonesia. Leaders of the two countries met in Beijing to sign the memorandum of understanding on jointly promoting economic cooperation within the Global Maritime Fulcrum, a concept coined by Jokowi early in his presidency, and the Belt and Road Initiative.

That partnership, which is a notable departure from traditional BRI projects in other countries, is still in its infancy. Whether Indonesia manages to redefine the outcomes of the BRI in its favor remains to be seen.

— The writer is an intern at The Jakarta Post.

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