Jakarta in Balancing Act as Ties Deepen with Beijing, Analysts Say

Enhanced relations carry significant benefits, and substantial risks.
Jakarta in Balancing Act as Ties Deepen with Beijing, Analysts Say Chinese foreign minister Wang Yi (third from right) speaks with Luhut Pandjaitan, Indonesia's coordinating minister for maritime affairs and investments, during a meeting in Parapat, Indonesia, Jan. 13, 2021.
Handout from Indonesia's Ministry of Maritime Affairs and Investments via AFP

Updated at 3:00 p.m. ET on 2021-06-21

Ties are growing between Indonesia and China, as Jakarta balances economic interests with concerns about Beijing’s expansive territorial claims and alleged human rights abuses, analysts say.

China is not the biggest investor in Indonesia, but its investments in Southeast Asia’s largest and most populous country have grown consistently, doubling to almost $4.8 billion in 2020 from $2.4 billion in 2017.

“Everything seems to come from China nowadays – vaccines, investment – and Mr. Luhut has been at the forefront of this,” Indonesian business tycoon Chairul Tanjung quipped to senior minister Luhut Pandjaitan during an online event in February.

Luhut, Indonesia’s coordinating minister for maritime affairs and investment, and Chinese Foreign Minister Wang Yi have met twice since the start of the year.

Earlier this month, Luhut led an Indonesian delegation for talks with Wang in China, where they signed five agreements on cooperation in the infrastructure, maritime, and investment sectors, details of which were not made public.

In January, Wang visited Luhut’s hometown in North Sumatra.

China is funding projects in Indonesia as part of its ambitious One Belt, One Road (OBOR) worldwide infrastructure-building program. These include the $6 billion Jakarta-Bandung high-speed rail project, which is expected to be completed next year.

And this year, Indonesia approved China’s proposal to conduct a study on the $400 million Lambakan Dam project in East Kalimantan, near the site of the future Indonesian capital in Penajam Paser Utara regency.

Luhut told businessman Chairul at the February event that these Chinese investments have no strings attached.

“They are not dictating anything,” said Luhut, who is widely regarded as President Joko “Jokowi” Widodo’s right-hand man.

‘Tepid response’

But Indonesia’s enhanced relations with China carry substantial risks, said Aristyo Rizka Darmawan, a lecturer in international law at the University of Indonesia.

“For instance, many observers have criticized Indonesia — the largest Muslim country in the world — for its tepid response to the alleged human rights violations in Xinjiang to the minority Uyghur Muslim ethnic group,” Aristyo wrote in a recent article on the website of the ISEAS – Yusof Ishak Institute in Singapore.

A Chinese Foreign Ministry statement about Luhut’s visit in June said that Indonesia adheres to “the principle of non-interference in other countries’ internal affairs” and stood ready to “help the Indonesian people and the international community have a better understanding of the development and progress of China's Xinjiang.”

Western nations and rights groups accuse China of egregious abuses against the Muslim Uyghurs of Xinjiang, which China angrily denies.

Witnesses and experts testified about enforced disappearances, compulsory sterilization and forced contraception, organ harvesting, and torture by Chinese authorities in Xinjiang, at a tribunal in London this month investigating whether China’s treatment of its ethnic Uyghurs and other Turkic Muslims constitutes genocide.

“Indonesia’s foreign policy can be driven by economic interest and transactional considerations,” Aristyo wrote. “But Jakarta should mind the gap in its approach to China and also seek to balance its growing relationship with Beijing by pursuing deeper relations with other major powers with interests in the Indo-Pacific.”

‘The limitations of pushing back’

Meanwhile, Indonesia and China have had several spats over maritime rights in waters off Indonesia’s Natuna Islands, located in the southern reaches of the South China Sea.

In January 2020, Jakarta sent warships and fighter jets to the area after scores of Chinese fishing vessels escorted by the China Coast Guard entered Indonesia’s exclusive economic zone (EEZ).

China’s incursions near the Natunas “were serious in terms of vessel numbers and duration ... one of many to rattle Indonesia’s security establishment,” Natalie Sambhie, executive director of Verve Research, an Australia-based independent think tank, told BenarNews, an RFA-affiliated online news service.

Indonesia has also protested to China over what it called the slave-like treatment of its sailors working on Chinese fishing boats. At least 16 Indonesian sailors working on Chinese boats have died since late 2019, according to officials.

Indonesia’s stance in the Natuna Sea has been consistent – balancing concerns about sovereignty with the need for investment and COVID-19 relief, Sambhie said.

“While these policymakers are well aware of the slow erosion to national confidence and even sovereign rights posed by China’s incursions, they are also well aware of the present-day limitations of pushing back,” she said.

Dewi Fortuna Anwar, a senior researcher on international politics at the Indonesian Institute of Sciences (LIPI), said that the COVID-19 pandemic provided momentum for closer ties between Jakarta and Beijing.

“Amid vaccine nationalism in several countries, China has been willing to share their vaccines. This goodwill gesture paved the way for trust,” Dewi told BenarNews.

Indonesia’s stance “also strikes an equilibrium between Indonesia’s interactions with other large powers like the U.S., India and Japan,” Sambhie said.

She cited the fact that Indonesia accepted search-and-rescue support from Australia, India, Singapore, and the United States after the KRI Nanggala-402 submarine sank in April, killing all 53 sailors on board.

Jakarta also accepted assistance from China, which sent three ships to support efforts to lift the wreckage of the submarine, albeit unsuccessfully, from waters off Bali a half-mile deep.

‘It benefits the country’

Indonesia is as open to working with anyone as long as it benefits the country, said Rizal Sukma, a former Indonesian ambassador to Britain.

“We are working with China in sectors where we think cooperation is essential for our national interests. Indonesia will work with any country when we need to and stand up to anyone whenever we must. That is our principle,” Rizal told BenarNews.

“If the U.S. is serious about building relationships with ASEAN countries, including Indonesia, naturally we are open to that as well,” he said, referring to the 10-member Association of Southeast Asian Nations.

Meanwhile, China is now in a position to invest in many countries, said Yose Rizal Damuri, head of the economics department at the Center for Strategic and International Studies (CSIS) Indonesia.

“Now that China is economically maturing, they can expand by doing what Japan did in the ’70s,” Yose told BenarNews.

“In the last 10 years, they have invested more in natural resources, but now the direction is to build a production bases in countries. If Indonesia can tap this, we will benefit much.”

Growing economic relations were not likely to cause Indonesia to become dependent on China, he added.

“Our biggest investor is Singapore, and previously it was Japan. Have we become dependent on these two countries?” Yose said.

“Geopolitics can affect economic ties, but the opposite is unlikely.”

Reported by BenarNews, an RFA-affiliated online news service.


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