At the second Belt and Road Forum in Beijing in April this year, Indonesia took its first careful steps toward embracing the Belt and Road Initiative (BRI) in Indonesia when President Joko “Jokowi” Widodo announced 30 projects worth US$91.1billion for Chinese Belt and Road investment. Since then, it has become clear that Indonesia is attempting to define clearly what the BRI means in Indonesia, and which projects fall under the umbrella of the initiative.

But apart from clarifying what is and is not in China’s 21st century Silk Road, Indonesia is also hoping to avoid certain pitfalls that have become synonymous with Chinese President Xi Jinping’s flagship program.

“We learned from other countries’ — especially Asian countries’ — experience in difficulties when they deal with the Belt and Road Initiative,” Atmadji Sumarkidjo, an expert staffer to the coordinating maritime affairs minister, told The Jakarta Post. “So we’ve proposed that it should not only be BRI but also the Global Maritime Fulcrum of Pak Joko Widodo. The Chinese agreed to our preconditions if they want investment in any kind of project here in Indonesia.”

What difficulties is Indonesia trying to avoid?

The government is well-aware of accusations that the BRI is a “debt-trap” designed to entice developing countries into accepting loans that would tether their country to China and Chinese labor.

In Malaysia, a multibillion-dollar railway launched in 2017 was scrapped by Prime Minister Mahathir Mohamad after he was elected because it was too costly, and only resumed after China agreed to a reduced price tag. And in Sri Lanka, a debt-ridden government handed over ownership of the China-funded Hambantota Port to a Chinese company for 99 years.

Furthermore, observers have noted that the BRI allows China to offload surplus goods and labor to other countries.

“If a Chinese construction team is involved, it would bring with it their management team and its own team of engineers, I suppose,” said Pradumna Bickram Rana, an economist at the S. Rajaratnam School of International Studies (RSIS). “In regard to the actual construction people, it would depend on whether the country can supply qualified labor to build a road, railroad, if not then I suppose the Chinese would bring them in.”

In Indonesia, Chinese investment often comes with Chinese labor.

Some 2,500 Chinese workers were legally employed at the partially China-owned Morowali Industrial Park in Central Sulawesi in October 2017 compared to 15,000 Indonesian workers, the Post reported in November that year. And at the Batang Toru Dam, 20 percent of the total workforce is to be foreigners, according to a North Sumatra Hydro Energy spokesperson.

Indonesia’s solution to avoid the ‘debt trap’

Indonesia is seeking a business-to-business approach in a departure from the script followed by Belt and Road projects so far. Rather than having the government take on loans to fund these projects, as Sri Lanka did, Indonesia is opting for businesses to seek out investment from Chinese companies without the government forking out any cash.

“Once it is [government-to-government] relations, automatically it [will go] to our debt, it will be a burden for the government,” said Atmadji, “So the Indonesian government decided ‘No, let the business-to-business make the deal themselves.’ So the risk is only [on the company].”

By opting for businesses, rather than the government, to be on the frontline of Belt and Road Initiative projects, Indonesia can avoid taking on potentially burdensome government debt.

Instead of swapping Chinese dollars for debt, Indonesia hopes to swap it for equity.

For example, the Indonesia Morowali Industrial Park has been highlighted by the government as a prime model for a business-to-business venture with Chinese investment. But Chinese firm Shanghai Decent Investment (Group) holds 49.69 percent shares and is the largest shareholder.

“[The Indonesian government] does not want what happened to Sri Lanka to happen in Indonesia,” said Tiola, an Indonesia analyst at the Singapore-based RSIS.

Aiming for multipolarity, not hegemony

Avoiding debt is not the only way Indonesia is hoping to change the tune of the BRI. In official government documents and speeches, you will not often find the acronym “BRI” standing alone, a lightning rod for accusations of Chinese hegemony in Asia.

Instead, Indonesia coined the notion of GMF-BRI, or Global Maritime Fulcrum-BRI. It is to be “a synergy between two great nations”, according to one official document.

In 2014, fresh off his first presidential election victory, Jokowi proposed his concept of a “Global Maritime Fulcrum” in Indonesia. “Jalesveva Jayamahe”, he announced, a slogan meaning “In the sea, we triumph”, in his first speech as President at the People’s Consultative Assembly.

By building more deep seaports and ships, focusing on the maritime economy, modernizing the navy and fighting piracy in Indonesian waters, Jokowi envisioned that Indonesia could become a maritime power.

“In a country where more than 80 percent of the territory is water, this is what Indonesia should have done from the beginning, the question [becomes] ‘is it possible?’” said Tiola.

In October 2018, Indonesia and China tied the knot between the two concepts — China’s BRI and Indonesia’s Global Maritime Fulcrum. Leaders from the two countries agreed in Beijing to promote investment through these two platforms.

The marriage makes strategic sense. It helps Indonesia deflect perceptions that it is becoming a satellite of China, and helps China deflect perceptions that it is becoming a hegemon.

Ridwan Jamaluddin, undersecretary for infrastructure coordination at the Office of the Coordinating Maritime Affairs Minister, emphasized Indonesia’s desire to make China-backed projects multilateral by involving third parties, such as the Port of Rotterdam in the Kuala Tanjung Port project.

“For China, it is also good news because they are also trying to maintain the impression [that] China is not going to build a hegemony,” said Ridwan.

Two of the proposed BRI projects in Indonesia are ports, Kuala Tanjung Port in North Sumatra and Tanah Kuning Port in North Kalimantan.

Whether the maritime fulcrum can succeed given the historical dominance of the Army and land-based infrastructure in Indonesia remains to be seen. One thing is clear: For the Chinese Silk Road to make room for an Indonesian maritime fulcrum would take a lot more than just redefining what “Belt and Road” means.

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— The writer is an intern at The Jakarta Post.

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