A Catch-22 from China that could derail Indonesia’s Widodo
To win votes, the Indonesian leader needs Chinese cash to build railways and ports. To build those railways and ports he needs to accept the Chinese workers who are losing him votes
On his FIRST visit to Indonesia this month as president of China Railway Corp, Lu Dongfu could have been forgiven if he felt bemused at the delays bedevilling the US$6 billion (HK$47 billion) Jakarta-Bandung high-speed rail project that his company was helping build.
Disputes with landowners have meant work has only just started on several sites along the 150km route – three years after Lu’s firm beat out Japanese rivals for the train line. By comparison, Lu said in January that the CRC would bring another 3,500km of high-speed rail into operation in China this year alone.
“He said he understands,” said one Chinese reporter accompanying Lu on a visit to a construction site near Jakarta’s Halim Airport, where the excavation on tunnel No. 1 is now under way. The reporter did not want to be identified because he was discussing an off-the-record conversation. “He said it’s never easy pushing infrastructure projects in democratic countries.”
Such comments hint at a growing sensitivity on behalf of Chinese officials towards local laws. If so, that is good news for President Joko Widodo, who has staked his hopes of a second term partly on securing badly needed infrastructure investment from China.
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As China has stepped up investment in Indonesia – and more Chinese have taken up jobs here – resentment has driven some locals to protest. That has left Widodo to balance his country’s appetite for trains, ports and power plants with protecting local workers as he eyes re-election next April.
“Widodo’s relationship with China is shaping up as an election issue,” said Keith Loveard, senior analyst with Jakarta-based business risk firm, Concord Consulting. “The relationship with China could turn toxic for him.”