Jakarta. Economic think tank Celios revealed that Indonesia could fall into the Chinese debt trap if not careful, especially since the money that the ASEAN country has to pay off continues to rise under the Belt and Road Initiative (BRI). 

The BRI is a colossal Chinese infrastructure project that stretches across the globe, including Indonesia. Projects under this initiative include the Jakarta-Bandung high-speed train, which is slated for operation in August. Celios reported that Indonesia owed $20.2 billion to China as of 2022.

“The debts will likely continue to rise in line with more BRI projects that [Indonesia and China] have already inked, but have not yet implemented,” Zulkifar Rakhmat, the director for China-Indonesia studies at Celios, told a press briefing in Jakarta on Thursday.

According to Zulkifar, Indonesia today is still not in a Chinese debt trap. 

“However, there are signs that [the debt trap] is looming [over Indonesia], especially if the government is not careful. ... But for now, our economy can still withstand the debt trap, unlike other countries like Sri Lanka,” Zulkifar said.

China in 2010 loaned more than $1 billion to Sri Lanka for the Hambantota Port construction. In 2017, however, Sri Lanka handed over the port to China on a 99-year lease after failing to repay its debt. 

"Countries who have fallen victim to the debt trap are usually those who are actively courting Chinese investment. They also have a weakening political system that makes the country feel they need China more than China needs them. Indonesia is showing these signs judging by the [increasing] Chinese investment over the past years,” Zulkifar said.

According to Celios, Indonesia has 71 BRI-related infrastructure projects, which are worth $20.3 billion if combined. 

Chinese investment in Indonesia has also been on the rise over the past years, although the number dropped in 2021. Government data shows China invested $8.2 billion in Indonesia throughout 2022, a huge jump from $3 billion the previous year. Indonesia also attracted $4.8 billion in Chinese investment in 2020.

According to Zulfikar, Indonesia needs to muster up the courage to negotiate with China to establish a more mutually beneficial partnership.

“It is not just us who need them. China also needs Indonesia, and our country needs to be aware of this fact. … China aims to finish this megaproject by 2049, which coincides with the centenary of the People's Republic of China's founding. I doubt China would achieve this goal without Indonesia’s role,” Zulfikar told the conference.

He also urged the Indonesian government to make sure that the BRI projects would not become China's debt traps.