IN a bid to capitalise on Beijing’s Belt and Road initiative, Indonesia is vying to secure up to US$60 billion from Chinese investors despite widespread international concern of the Asian superpower’s so-called debt trap.
Ridwan Djamaluddin, the deputy for infrastructure at Indonesia’s Coordinating Ministry for Maritime Affairs, said Jakarta has been in “structural communication” with Beijing since last year on the prospect of infrastructure peojects worth a combined US$50 billion to US$60 billion.
In an interview with Reuters, Ridwan said Indonesia has proposed potential projects across the archipelago, while officials and experts from China have visited various regions to identify projects to fund.
“We are fully aware that we must not let this cooperation end badly,” Ridwan was quoted as saying.
“Other countries have been forced to pay back loans and some have let go of their assets. We don’t want that.”
In recent years, China’s President Xi Jinping has pushed for the trillion-dollar effort to create a modern-day Silk Road but despite its strategic location, Indonesia, which is Southeast Asia’s largest economy has not been one of the biggest beneficiaries of the push.
Indonesia’s biggest Belt and Road project is the US$6 billion railway which links Jakarta to Bandung but the construction has faced problems related to land procurement.
The projects on offer include four hydropower plants with a combined value of US$35 billion in North Kalimantan, mine-mouth power plants, industrial complexes, ports and other infrastructure in its provinces of Central Kalimantan, North Sumatra, North Sulawesi and on the resort island of Bali.
Unlike many other countries receiving high Belt and Road investments via government-to-government loans, Indonesia insists on business-to-business (B2B) structure for all its deals, which is why it takes longer to reach agreement, Ridwan said.
“I understand we’re not as quick as other countries to tap the fund because the fund owner will think longer on our offers,” Ridwan said.
He said the next round of talks between officials from Jakarta and Beijing was expected to take place in April.
China has been criticised for putting Belt and Road beneficiary countries into insurmountable debt but Ridwan sayd the B2B model would help shield Indonesia from such a scenario.
Indonesia, he said, would also insist on employing Indonesian workers and utilising the most advanced, environmentally-friendly technology for all Chinese investment.