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Chinese companies set to benefit if front-runner Prabowo Subianto seals victory in Indonesian presidential election
- Opinion polls favour the ex-general bent on continuing an economic strategy anchored on business ties to China
- ‘‘Chinese companies are likely to benefit the most given the positive economic relations that [Joko Widodo] has established with Beijing,’ says analyst
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Days before Indonesians vote for their first new president in a decade, opinion polls favour an ex-general bent on continuing an economic strategy anchored on business ties to China while vowing to sustain a more neutral foreign policy stance between Washington and Beijing.
As the front-runner in the February 14 election, defence minister Prabowo Subianto has pledged to build on the business-friendly policies of President Joko Widodo, which includes a more than eight-fold increase in Chinese foreign investment over his 10 years in office.
“Chinese companies are likely to benefit the most given the positive economic relations that Jokowi has established with Beijing,” said Dedi Dinarto, lead Indonesia analyst at the policy advisory firm Global Counsel, using a popular nickname for the president. Those ties “are likely to continue under Prabowo,” he added.
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Many Southeast Asian nations find themselves juggling their economic dependence on China with security concerns that favour a more nuanced approach to Beijing and the West. But Indonesia, a country of more than 270 million people with the world’s biggest Muslim population, sees itself as a rising middle power capable of effectively managing that dichotomy.
When Jokowi took office in 2014, he set out on an ambitious economic and infrastructure agenda which, along with the passage of key business reforms, saw Indonesia grow at an average pace of 5 per cent a year. In that time, China became one of its top sources of foreign direct investment, totalling US$7.4 billion last year, according to government data. By comparison, FDI from the US stood at US$3.28 billion.
The investment included Beijing helping build the region’s first high-speed rail line in Indonesia under the Belt and Road Initiative, with the project coming on line last year. Indonesia also benefits as China’s largest supplier of nickel sulphate.
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