Widodo woos Japan as infrastructure ambitions stall
China fails to deliver the results the Indonesian leader needs to show voters
JUN SUZUKI, Nikkei staff writer
JAKARTA -- Amid major delays in his trademark infrastructure program, Indonesian President Joko Widodo is working to strengthen ties with Japan in hopes of building a legacy ahead of the 2019 presidential election.
Widodo called for the swift development of Indonesian infrastructure in a meeting Jan. 19 with Toshihiro Nikai, secretary-general of Japan's ruling Liberal Democratic Party. The Indonesian leader named five projects Japanese players are involved in, such as the development of the Patimban port and the construction of a mass rapid transit system in Jakarta. He seemed satisfied when told that construction at Patimban would begin in May and that a portion of the port would open in March 2019.
Key gubernatorial elections are coming up this June, to be followed by the presidential vote in April 2019. The proposed timeline fits perfectly with Widodo's hopes to make tangible progress on infrastructure development before he likely seeks re-election next year.
Bilateral ties seem to be warming as the countries celebrate their 60th anniversary of diplomatic relations this year. But Widodo, who took office in October 2014, has not always been on such great terms with Japan. Though his administration denies it, he is said to be relying more on China to help develop infrastructure.
Widodo has played Japan and China against each other for a piece of his 5,000 trillion rupiah ($366 billion) infrastructure initiative. A key example was with Indonesia's first high-speed railway. The Southeast Asian nation was initially leaning toward adopting Japanese shinkansen bullet trains using yen-denominated loans. But Widodo, eager to avoid debt, decided in September 2015 to go with the Chinese bid, which came at no cost to the Indonesian government.
His administration also jumped on Chinese proposals for new power plants and other projects, which promised a quick turnaround and no cost to the government. Chinese direct investment in Indonesia rose to $2.7 billion in 2016, nine times the 2013 figure.
But many of these projects may end up pipe dreams. Two years after the groundbreaking on the high-speed railway in January 2016 to much fanfare, all that has happened is site preparation along a portion of the planned route. The Chinese side refuses to cough up promised funds until Indonesia secures all necessary land, bringing the project to a standstill.
The railway stands little chance of opening as planned in 2019. This was a major miscalculation for Widodo, who hoped to have it completed before the election. The government began quietly reviewing its plans in January on the president's orders.
Only such relatively low-profile projects as highways and regional ports have made much headway, while Widodo's most prominent initiatives face delays. The only major projects that could still be completed before the April 2019 election are the Patimban port and the MRT -- both joint projects with Japan.
Indonesia has hit snags in plans to bolster its infrastructure through participating in China's Belt and Road Initiative. Issues including maritime disputes in the South China Sea have also soured public opinion on the Asian giant, making it hard for Widodo to push for greater cooperation.
"China promises to invest but just doesn't seem to deliver," an Indonesian official said. "Japan is slow at planning but always makes things happen." A growing number of voices in the government say it has no choice but to rely on Tokyo.
In a December interview with The Nikkei, Widodo said he was closest with Japanese Prime Minister Shinzo Abe out of all of the world's leaders. Ministers involved in the infrastructure initiative also visited Japan 16 times last year. Widodo has even appointed former Trade Minister Rachmat Gobel, whose family runs a joint venture with Panasonic, as a special envoy to Japan. The two countries are ironing out plans for more major infrastructure projects, such as building a railroad across the island of Java.
"The 'akai ito' or the red string of fate that connects the two countries, may be stretched or tangled in times, but it will never break," Widodo said in a message for the 60th anniversary of diplomatic relations.
Japan had issued a total of 4.8 trillion yen ($44.6 billion at current rates) in yen-denominated loans to Indonesia as of the end of fiscal 2015 to aid the development of an important economic and security partner. The countries need to focus on untangling and strengthening their "string of fate" with an eye on their relationship even after the presidential election.