It’s Complicated: Indonesia keen on China’s investments despite fishing disputes

The open confrontation between Indonesia and China in Indonesia’s fish-rich Natuna area and subsequent coolness between the two countries belies President Joko Widodo’s moves to establish closer ties with Beijing during the first months of his presidency, which began in October of 2014.

The president’s first international visit was to Beijing, followed with his full pledge to join the China-led Asian Infrastructure Investment Bank (AIIB), causing some nationalists at home to point to Indonesia’s “independent and active” foreign policy manifesto, telling Jokowi that although Indonesia needs investment from China, the second largest economy in the world, he should keep his distance.

Jokowi’s political opponents have raised the issue of incoming thousands of Chinese workers reported to be illegally working in Indonesia after the president signed many investment agreement with China. Antipathy to those workers has made headlines in influential Jakarta media for months.

The public was also shocked by Jokowi’s sudden decision to adopt Chinese technology instead of the long-planned Japanese equipment for Indonesia’s first high-speed railway line connecting the capital city Jakarta and Bandung in west Java.

The line is planned to span 42 kilometers from Jakarta to Bandung and is expected to be completed by 2019, at the time when Jokowi is expected to be seeking re-election.

The Ministry of Transport said the holding company PT Kereta Cepat Indonesia China (KCIC), had moved so fast that it hadn’t even obtained a business license for public railway infrastructure, urging them to work fast on the papers to get the project going.

Former transportation Minister Ignasius Jonan refused to grant instant permits to the project, saying that his ministry is taking extra precautions since the Chinese loan has a tenure of 50 years and the government wants all assets to be in good condition when they are eventually handed over to the government.

Ignasius Jonan was one of several ministers that Jokowi replaced during the July 27 cabinet reshuffle.

In the meantime, Indonesian navy and Chinese vessels and coast guards are bumping to each other many times around the Indonesian territory off the Natuna island, causing clear irritation in Jakarta.

The latest incidents involved the MV Kwang Fey 10078 and Han Tan Cou 19038 vessels, which were reported to have been fishing illegally in Natuna waters near the Riau Islands.

A Chinese Coast Guard vessel forcibly rescued MV Kwang Fey 10078 by pushing it back into Chinese waters, taking it away from a patrol boat from the Indonesian Maritime and Fisheries Monitoring Task Force that was escorting the boat after apprehending it.

After the latest incident and several diplomatic notes sent to Beijing, Foreign Minister Retno Marsudi said Indonesia wants to maintain good relations with China but will not negotiate over violations of Indonesia’s sovereignty and jurisdiction on the Exclusive Economic Zone (EEZ) and the continental shelf.

“We have a good relationship with China. We will strive to maintain our good relations along with international laws,” Marsudi told journalists at the State Palace after the incidents took place.

Jokowi then took several of his ministers for a “quick cabinet meeting” on board of Indonesia’s warship to send signals to Beijing that Indonesia is serious in defending its sovereignty.

These incidents add tensions between China and its neighbors the Asean member countries, as China has sought to assert its control in the region with its self-claimed nine-dashed line which take Chinese ownership almost to the doorsteps of several of the littoral countries.

China claims most of the South China Sea, which includes overlapping claims by Vietnam, Taiwan, the Philippines, Malaysia and Brunei.

Will Indonesia add to these tensions, and how should Indonesia react to the perceived “muscle flexing” by Beijing?

“I think Indonesia is only attempting to maintain its strategic positions vis-a-vis China,” Yeremia Lalisang, a scholar from the University of Indonesia, told The Parrot.

“On the one hand, Indonesia has to reflect its commitment to international law, so there is no reason for the Indonesian government not to push China to respect it. However, it cannot be ignored that China is now the world’s second largest economy, and it’s also clear that Jokowi’s presidency has mainly focused on the efforts to revive Indonesia’s national economic development. So, it seems Jakarta clearly understands that cooperative relations with China could contribute positively to the attainment of such a goal.”

The public and policymakers “should not only take the partial understanding of China’s muscle flexing, because then we will lose the opportunity for cooperation’s in other fields,” he added.

Today, Indonesia’s US$44 billion annual trade with China remains strong and first quarter investments from Beijing experienced a 400 percent increase from last year. However, China’s 14 percent realization rate on its investment pledges is much smaller than Japan and South Korea’s 70 percent realization rate.

 

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s