But major economies in ASEAN have had their issues with BRI projects. In an unprecedented move, in May 2023 former Indonesian vice president Jusuf Kalla, in controversial remarks about ethnic Chinese controlling the domestic economy, spoke out against the willingness of the incumbent administration in Jakarta to let China dominate the Indonesian economy. Kalla claimed that the country's debt had bloated to 1,000 trillion rupiah or US$67 billion, a figure at odds with government data.
Indonesian President Joko Widodo, known as Jokowi, who came to office in 2014, recognized a natural fit between Indonesia's untapped marine resources and China's enthusiasm to expand its economic ties and commercial activities in the region. Jakarta knows that cooperation with China is important, but its engagement in the BRI is a measured play to protect its interests and maintain sovereignty.
With their respective economic strengths, China and Indonesia have valuable assets for increasing cooperation and chasing shared interests through BRI. The Indonesian government's commitment to speeding up infrastructure development lines up well with the goals of the BRI. Indonesia needs investment in many sectors: better transportation networks, more roads, airports, ports and other public facilities that could help improve logistical efficiency.
The BRI's emphasis on regional connectivity and economic cooperation aligns with Indonesia's goals and presents opportunities for everyone to win. Leveraging their strong bilateral relations and economic prowess, China and Indonesia can work together to drive sustainable development and prosperity within the framework of Belt and Road.
While Indonesia's economy has grown significantly, red tape and bureaucracy continue to hinder progress. The government's efforts to reform bureaucracy have had mixed results despite the passing of several economic policy packages aimed at streamlining regulations and law enforcement.
The US$6.2 billion high-speed railway project connecting Jakarta and Bandung is an example of the challenges posed by Indonesian bureaucracy. The project commenced in 2015 but land clearance issues and regulatory hurdles have left it suspended. After many adjustments, especially on budget issues, the limited operation of the railway is scheduled for August 2023.
By prioritizing its maritime strength, Indonesia can align its development goals with Chinese leader Xi Jinping's vision of advancing his country's economic interests through the sea. Building port infrastructure and improving inter-port connectivity would benefit both countries and facilitate trade activities. Jokowi’s initiatives – such the Global Maritime Fulcrum – align well with China's emphasis on sea-based cooperation, creating collaborative opportunities. The two countries, however, must resolve or set aside their dispute over the part of the South China Sea, which Jakarta refers to as the North Natuna Sea, around the Natuna Islands, which Indonesia controls.