Saturday, September 30, 2023

China's Belt and Road Initiative: Indonesian Response

Iskandar Hadrianto
May 17, 2017 | 4:44 pm
Chinese President Xi Jinping urged major multilateral institutions on Monday (15/05) to join his new Belt and Road Initiative, stressing the importance of rejecting protectionism in seeking global economic growth. (Reuters Photo/Lintao Zhang)
Chinese President Xi Jinping urged major multilateral institutions on Monday (15/05) to join his new Belt and Road Initiative, stressing the importance of rejecting protectionism in seeking global economic growth. (Reuters Photo/Lintao Zhang)

"The Belt and Road Initiative represents the largest initiative of its kind launched by a single country — the People's Republic of China — and comprises two large segments: the Silk Road Economic Belt, a land route from western China mainland that goes to Central Asia up to the Middle East, and the 21st Century Maritime Silk Road, a strategic and important sea-lane encircling Southeast Asia, the Persian Gulf and touching the Horn of Africa."

President Joko Widodo went to Beijing on May 14-15 on the Chinese government's invitation to attend the "Belt and Road Forum for International  Cooperation," better known as the Belt and Road Initiative (BRI) — a comprehensive partnership encompassing the Silk Road Economic Belt and the 21st Century Maritime Silk Road.

The grand economic strategy was first announced by President Xi Jinping in Kazakhstan 2013. Since then, BRI has gained support from populist movements which have raged against the global trade regime (WTO) and 100 countries are already on the list to support it.

Uncertain global trade prospects and the emergence of rigid protectionist policies, such as Trump's "America First" policy and the European Union's increasingly regulated market, coupled with the unceremonious death of the Trans-Pacific Partnership (TPP) and doubts about Asean's ability to survive the "global economic warfare," made it especially important for Indonesia to actively take part in BRI.


Think positively

President Xi Jinping's new policy, harnessed by partnership with the New Development Bank and multilateral financial institutions have resulted in the new Asian Infrastructure Investment Bank (AIIB), launched in 2014.

This infrastructure initiative is considered by many as a breakthrough, and even offering a "new hope" for half of the world's countries, including Indonesia.

Indonesia's presence in the BRI meeting was crucial. Not least because it was attended by representatives of two thirds of the world's population — more than a third of them major global producers.

One of them, China, is ready to roll out at least $4 trillion in investments.

Indonesia cannot and should not turn a blind eye on China's geopolitical awakening. The logic is crystal clear: Jokowi has already planned several major infrastructure projects, including improving transport between cities and remote areas. Going to Beijing will not hurt his chances to woo investment for the projects.

Indonesia had a chance in the meeting to get involved in decision-making for the initiative, formulating rules and regulations and finding solutions for differences and obstacles as well. This is the very manifestation of an economic-political approach to diplomacy.

President Jokowi had the opportunity to fashion an effective Indonesian response to China's bold initiative. The first thing on his mind would have been finding ways to arrest the slackening of intra-regional trade, which was a direct consequence of Trump pulling the US out of TPP and the gloomy prospect of the WTO.

However, President Jokowi must also keep an eye on China’s worrisome hegemonic ambitions.

China offers many of the same things that its competitors in Indonesia — Japan and South Korea — already offer. These two countries have already been deeply involved in many of Indonesia's economic ventures.

Indonesia has to play its card wisely, juggling its relationship with these three major powers by focusing on trying to find a "win-win solution" for everyone. Indonesia cannot just forget its long-time partners to embrace a new one. That would be both unethical and strategically dangerous.

What China offers is access to a global market driven by interconnectivity and a powerful supply chain. What Indonesia needs is financing for domestic infrastructure projects. The two have to work hand in hand.

Jokowi's planned new seaports and the BRI will allow products to be shipped faster to potential buyers in the so-called Eurasfrica — Eastern Europe, Asia and Africa — where Indonesia's traditional markets are.

But while on the road to a closer relation with China, Indonesia must also keep the trust and confidence of its traditional trading and investment partners in Asia, the EU and the US.

Iskandar Hadrianto is a foreign policy analyst. He is a former senior diplomat and an official at the Indonesian Ministry of Foreign Affairs, a graduate of the Salzburg Diplomatic Academy and an alumnus of the United Nations Leadership Academy. He also worked for the Asia-Pacific Center for Security Studies.

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