Tag: Ignasius Jonan

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.

 

 

Problems beset Indonesia’s first high speed train project

A week after President Joko Widodo broke ground on Indonesia’s first high-speed railway line, construction has been on hold over administrative issues, including a lack of a permit from the Ministry of Transport. Continue reading “Problems beset Indonesia’s first high speed train project”

App-based Transport Ban Shows Lack of Coordination Under Jokowi’s Leadership

Indriaty Octarina was enraged when she found out that her favorite mode of transport, the popular Uber-style motorcycle taxi service Go-Jek, was declared illegal by Indonesian transport minister Ignasius Jonan on Friday last week.

As a worker who must go through the traffic hell from her home to office located in the Jakarta Stock Exchange building in South Jakarta every day, the news struck her like a thunderbolt, she said.

“I use Go-Jek every day because it is faster and cheaper to go anywhere with it. Taxi fare is just too expensive, and public transportation is just not safe or comfortable. What should we do now?” she asked The Parrot.

The news that Jonan had announced a ban on app-based transportation in any form – including Go-Jek, Grabbike and Uber – shocked not only Indriaty but most of the Indonesian public.  Although the minister indicated that the ban had legal standing, nobody could understand why a ban was suddenly put in place on ojeks, or private motorcycles being used as public transportation, after millions of people, especially those in big cities, have used them for years.

But the new app-based transport, especially Go-Jek, with its vetted and uniformed operators, who are trained to be polite, is cutting dramatically into traditional taxi and motorcycle services.

“Calling on the National Police and regional governments to enforce the law on public transportation, under which the massively popular vehicle-hailing services like Uber and Go-Jek strictly speaking are illegal,” Jonan’s directive to the police said in announcing the ban.

In this case, the popularity of the app-based services won out in dramatic fashion.  Users and supporters vented their anger through social media and within hours the uproar had become so loud that Jokowi had to intervene. A few hours after Jonan announced the ban, the president reversed it.

“Don’t let the people be burdened because of regulations,” Joko said on his official Twitter account, adding that regulations “need to be managed” and that he would “immediately” summon Jonan for talks.

“Innovation by the younger generation should not be restrained and applications such as Go-Jek exist because they are needed by society,” Jokowi told reporters at the state palace only a few hours after the ban.

“I don’t know what has just happened. Such a strange day,” Indriaty Octarina the Go-Jek user told The Parrot.

Go-Jek’s founder and CEO Nadiem Makarim—one of the business people in Jokowi ‘s entourage during his recent visit to the United States – expressed his gratitude, calling it a victory for the democratic process and the people.

“Dear GO-JEK users, President ‘Jokowi’ just answered our prayers by cancelling the Transportation Minister’s circular regarding the prohibition of app-based ojek and online taxi services. Thank you very much for your support on social media,” Nadiem wrote in an e-mail sent to all Go-jek users, saying that he was touched by the enormous public support.

Nadiem added that the withdrawal also guaranteed the welfare of the families of around 200,000 drivers in several provinces in Indonesia who make a living as Go-Jek operators.

Go-Jek isn’t Alone

Nonetheless, the confusion regarding changes in public policy is not new under the Jokowi administration, with political analysts often saying it shows evidence of lack of coordination and that Joko is “unable to fully control his ministers.”

Earlier in January this year, for instance, Manpower Minister Muhammad Hanif Dhakiri announced that the government would require existing and prospective foreign workers to pass Indonesian language tests to be eligible for a work permit, a move seen by many foreign investors as protectionist.

The language proficiency requirement is mentioned in Manpower Minister Regulation No. 12/2013 on procedures for the employment of foreign workers. The regulation stipulates a number of requirements for foreign workers to obtain work permits, including the ability to communicate in Indonesian. However, the regulation excludes commissioners, directors and those in temporary employment.

However the plan was scratched in early March after Korean, Japanese, American and European business chambers objected to the latest manifestation economic nationalism from Indonesia’s establishment.

The plan was regarded as putting barriers in place for foreign investment at the same time the president has repeatedly said he wants to deregulate and speed up the process for obtaining permits to boost investment amid three years of declining pace in economic growth.

The previous coordinating minister for economics Sofyan Djalil told media in April that the business community basically “don’t want and don’t need” this kind of regulatory cleanup, raising more questions whether Joko Widodo is really in charge. It has led to a constant battle on the president’s part to try to keep the deregulation process moving.  Go-Jek and its app-based partners are just one of many examples of the difficulty.