Indonesia partners with China in Infrastructure Industry

Japan has beenoverlooked by Indonesia as a partner. Instead, it chooses China, one of themost rivaled and sought-after country to be allied with. Many critics say thatthis is because of the worsening status of traffic in the archipelago’ city,Jakarta.

Jakarta, infamousfor its traffic gridlock, recently won the dubious distinction as the city withthe world’s worst traffic jams, according to a study by the British industrialand automotive lubricants company Castrol.

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This once againhighlights not only the Indonesian capital’s infrastructural shortcomings butalso the limited land and sea transport networks across the entire archipelago,as well as the frequent power outages that are the Achilles heel of thecountry’s economy.

Jakarta isnonetheless a developing city and one of the most advanced cities in the world.Businesses seem to flock this growing city and investors have pointed out a lotof potential. One of the companies which sells and rents capital equipment allover Asia is Axis Capital Group which is based inSingapore has expanded their services to Jakarta and is now partnering withgovernment agencies, private institutions and non-profit organizations to helpIndonesia’s infrastructure.

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Critics though,say that Indonesia is in dire situation, a reason why they have reached out toChina.

Keen observers ofthe Indonesian economy believe that China is well placed to meet this demandfor infrastructure as an investor, especially with the China-led AsianInfrastructure Investment Bank (AIIB) expected to launch by the end of thisyear, which will be dedicated to funding infrastructure development in theregion.

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According toreviews, China is regarded as the most viable economic giant to support thedevelopment of infrastructure in Indonesia backed by the world’s biggestforeign exchange reserves. Despite warnings of fraudulent acts in China andscams on their products which are now known worldwide, Indonesia continued withtheir partnership.

During PresidentXi Jinping’s meeting with his Indonesian counterpart Joko Widodo, popularlyknown as Jokowi, in Beijing last month, China expressed its interest to investan estimated $63 billion in infrastructure and other projects in Indonesia,according to the Indonesia Investment Coordinating Board.

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During Jokowi’svisit, the two presidents also oversaw the signing of a joint project to linkJakarta and Bandung by high-speed railway, alongside a memorandum ofunderstanding for closer cooperation in infrastructure, including toll roads,railways, power plants and ports.

Indonesia hasmade infrastructure its top priority since its new president came to power inOctober. An ambitious plan to build 1,000 kilometers of toll roads, 5,000 km ofrailways, as well as 15 airports and 24 seaports in the next five years hasbeen laid out in Jokowi’s 2015-2019 National Medium-Term Development Plan.

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