Walking the Thin Tightrope of Economic Diplomacy
© Muchlis / 2020 Biro Pers Sekretariat Presiden
Seven days after the Height of North Natuna Sea debacle between the Indonesian Coast Guard and China Coastguard on the 3rd of January 2020, the Indonesian Presidential Secretariat (Sekretariat Presiden) Youtube Channel Uploaded three new videos. It has always been a norm in Joko Widodo’s administration to upload videos that act as a report of the President’s activities. These videos are also made with the aim to promote transparency within his office. Those seemingly innocent videos, which were uploaded on the 10th of January 2020 are actually a diplomatic signal to China.
On the same day as the video upload, President Joko Widodo held a meeting with three dignitary guests at the Istana Merdeka Presidential Palace. Those guests are the Foreign Minister of Japan, Motegi Toshimitsu along with his delegations; SoftBank Japan CEO, Masayoshi Son; and United States International Development Finance Corporation CEO, Adam S. Boehler. With two Japanese dignitaries and one US dignitary, both of these countries could be deemed as China’s rivals.
According to the release made by the Presidential Secretariat reported by detikNews, the Japanese dignitaries are in Indonesia to discuss possible trilateral agreements with Timor Leste in guarding the outermost islands of Indonesia including Natuna. They also agreed upon developing Integrated Marine and Fishery Centers in the Natuna Islands. Joko Widodo also agreed upon the plausibility of SoftBank Investments in the new Indonesian Capital with SoftBank Japan’s CEO. US dignitaries also echoed the same in their interest in investing in Indonesia’s tech, health, energy, and infrastructure development.
“We are cool, we are relaxed, we can resolve this amicably”
China and Japan are both eager investors in the Indonesian infrastructure development spree in the last five years. One example relating to this rivalry would be the Jakarta-Bandung High-Speed Rail project. Japan and China both bid on the same project and both fight hard to win the project tender. In the end, China won the bid and Japan went back home with nothing. Later, PM Shinzo Abe and the Japanese Parliament went so far in expressing their disappointment through formal bilateral meetings with Indonesia in 2015. As for the US, it is already obvious why they are a rival.
The Act of Puppeteering
Indonesia has been using this rivalry between nations who held interests in investing in Indonesia to its advantage. In 2017, the Indonesian Finance Minister, Sri Mulyani expressed her endorsement of competition between the Asian Development Bank (Japan) and the Asian Infrastructure Investment Bank (China). “This is a good competition,” said Sri Mulyani, who was in Yokohama to attend the 2017 annual ADB meeting as reported by the Nikkei Asian Review. Following the latest escalation in the North Natuna Sea, Indonesia seems to start pulling the strings of geopolitical diplomacy along with economic diplomacy. The move to invite Chinese rivals in Investing at Natuna Islands and also the new Indonesian capital in East Borneo is a strong signal to alert China that Indonesia might align with its rival if China continues to escalate their Illegal fishery exploitation in the Natuna Seas.
“The greatest victory is that which requires no battle”
Indonesian diplomacy manoeuvre was done to avoid physical clashes with much superior China in regard to Naval capacity. It is clear that Indonesia does not want any conflict escalation in the region. Further, Luhut Binsar Pandjaitan, the Coordinating Minister of Maritime and Investment Affairs emphasised his statement that Indonesia’s stance regarding its sovereignty is the same as before, there will be no negotiations regarding it. Then, he said that Indonesia does not have to employ harsh coercion tactics such as sinking ships, as it deemed not necessary. Defense Minister Prabowo Subianto also echoed the same, he said that we have to solve this problem in a “cool” manner. “We are cool. We are relaxed. We can resolve this amicably. After all, China is a friendly nation,” Said Prabowo on 10 Jan 2020 as reported by the Jakarta Post. Surely Indonesia is looking to achieve victory through de-escalation of conflict so Indonesia does not have to fight physical battles which would badly cost the state.
China Coast Guard Spotted at Natuna Sea | © 2020 BPMI
Avoiding Diplomatic Slips
Currently, the Indonesian government is walking on a tightrope. Balancing through the heat of China’s provocation aimed at pulling Indonesia out of her comfort zone. The Head of the Armed Forces Information Center, Major General Sisriadi expressed his concern regarding the issue in Natuna. He said that China provokes the Indonesian Armed Forces to defy international law of the sea by backing-up Chinese fishing boats in the Natuna with Chinese Coast Guard vessels. He then reassures that the Indonesian Armed Forces do not want to be provoked because if that happens the situation will be much worse.
Other than balancing through Chinese provocation in the North Natuna Sea, Indonesia still has to manage its economic relations with China. According to the Coordinating Body on Capital Investment (BKPM), in the first semester of 2019, China’s Foreign Direct Investment (FDI) ranks the third-highest investment value in Indonesia, valued at 2.3 Million US dollars. China’s Investment alone consists of 16.2% of Indonesia’s total FDI. If Indonesia wishes to escalate the physical tension at the North Natuna Sea, surely a considerable amount of Indonesia’s foreign investments will be at stake. Now, nobody would want that to happen, do we?
Author’s Note:
The content of this article has been updated to adjust for editorial mistakes and grammatical errors.
