Indonesia has been wary of an increasingly influential China. Widodo’s government does not refute the need for engagement with the great power. At the same time, Southeast Asia’s largest economy is determined not to compromise its self-preservation. China’s Belt and Road Initiative (BRI) has opened doors for Indonesia to beef up its national development plans. The ASEAN member state intends to secure a maximum amount of US$60 billion via the BRI, to build ports, factories, power plants, and other infrastructure in Bali, Kalimantan, Sulawesi and Sumatra. To date, the Jakarta-Bandung railway is the biggest BRI project in the country. Along with it come delays.
Indonesia’s government does not want to be indebted to China but it needs large amounts of loans for infrastructure-building, as well as the BRI projects. The Widodo administration does not want to put Indonesia in a situation that compels loan repayments or the sacrifice of assets, especially given China’s modus operandi for investment. The ASEAN state has put forward several conditions for collaboration. Firstly, it has refused government-to-government loans and insisted that all investment cooperation should be based on a business-to-business (B2B) structure. A condition that frees Indonesia from any bondage to China. Secondly, Chinese businesses operating in the ASEAN state are required to employ Indonesian workers. Thirdly, technology has to be transferable and environment-friendly. The motive could be, to reduce unemployment and migrant outflow, as well as to upskill the Indonesian workforce. While the intention behind such conditions is noble, implementation poses challenges.
Land procurement problems, delayed agreements and offers pending approval have dragged bilateral projects. The increase in the number of Chinese workers migrating to Indonesia has been directly proportional to rising Chinese investments in the country, implying that there is little or no change in the local unemployment situation. Indonesian workers claim that they are being deprived of jobs that rightfully belong to them. They do not see the need to import Chinese labour when their country is exporting Indonesian labour as a result of insufficient local employment opportunities. The labour ministry has a record of only 25,000 migrant workers from China, compared to claims of millions of Chinese workers saturating the local labour market. Though these claims are unfounded, they reflect the general ground sentiment. Hostility towards China’s involvement in the country may hinder deeper collaboration.
Furthermore, Indonesians do not trust Chinese intentions. Even though China is the ASEAN state’s largest trading partner and biggest source of investment, fears of great power politics compromising Indonesia’s sovereignty, prevail. Income disparity has also been stoking the flames of hostility. Ethnic Chinese Indonesians are openly criticised for possession of excessive wealth. This sentiment is transferred to Chinese migrant workers and China’s engagement in Indonesia. Acknowledging the rising dissatisfaction, Li Keqiang, the Chinese premier, has spoken in favour of businesses from his country employing Indonesians. It is not known if there has been any follow-up or businesses have started recruiting locals. More Indonesians continue to cross borders in search of jobs and more workers from China continue to enter the Southeast Asian state. Ironic, but true. The progress of BRI projects could alter the present pattern of labour mobility. The question is – how?
Great article meera.
Thanks Ashvin