JAKARTA (TheInsiderStories) – At the Belt and Road Forum (BRF), Indonesia and China has signed 23 memorandum of understandings on investment and trade cooperation on Friday (04/26). The cooperation contract includes the development of four economic corridors, rapid train research and technology cooperation, and the development of research of education.
According to Vice President Jusuf Kalla, beside signed the agreement, President Xi Jinping himself had promised to increase imports of agricultural, fruits, industrial products and mineral mining products. In the BRF itself, Xi has signed contracts for new projects worth US$64 billion.
For Indonesia, the funding will be focused on developing projects in 4 economic corridors, namely North Sumatra, North Kalimantan, North Sulawesi and Bali. Chairman of Investment Coordinating Board Thomas Lembong added, the economic corridors in Bali have been added from previously only three corridors.
He said, the four main corridors are chosen based on the location and potency. North Sumatera is a logistic hub in the Melacca Strait area, North Kalimantan is well-known for its world-class hydro power resources, North Sulawesi and Bali for Chinese tourists.
Lembong realized that the BRI cooperation implementation will face some challenges. But he sees that the infrastructure connection between BRI participants could boost emerging countries’ trade, tourism, and investment.
“Collaboration of Belt and Road is an ambitious and complex collaboration. But behind it all, it can potentially be a noble goal for the world economy through the construction of the infrastructure needed,” He noted.
Previously, Coordinating Minister for Maritime Affairs Luhut Pandjaitan said that BRI had become an alternative to supporting development projects. This showed that China, as the main actor, is able to respond to the needs of the international community, he added.
“Indonesia has allocated four corridors for the BRI project. It is in North Sumatra, North Kalimantan, North Sulawesi, and the famous island of Bali. Except Bali, the three provinces have poverty rates of around 7 to 9 percent,” Panjaitan stated.
He stressed, BRI projects must contribute to reducing poverty in these three provinces because government policies are basically to reduce poverty and protect the environment.
He point out, today, no region can survive by closing its borders from trade. Indonesia believes in openness, pragmatism and innovation, he said.
While, Vice Chairman of National Development and Reform Commission Ning Jizhe, expressed China’ desire to be able to participate in several infrastructure projects in Indonesia.
Finally, the two countries agreed to sign a regional economic improvement cooperation, namely the Kuala Tanjung Port project.
“We use the Chinese network to improve Kuala Tanjung’s performance. They are willing to use their network to use the services of the Kuala Tanjung port,” said Pandjaitan.
Furthermore, he invited China to participate in Indonesia’ infrastructure development with conditions, good environmental standards, integrated development approaches, utilization of Indonesian labor, technology transfer, and guided by international standards.
The BRI itself has been hit by critics, saying that the infrastructure projects burden financial costs to several countries. For and example, BRI projects are considered to increase the debt burden for Indonesia, which has now reached Rp22 trillion (US$1.54 billion).
Moreover, the construction of a steam power plant in the project will charged the state-owned power producer, PT Perusahaan Listrik Negara and may be unused because in the region there is an excess of electricity supply.
But, Pandjaitan claimed that Indonesia cannot be trapped in the debt trap of BRI because the government does not used a government to government (G-to-G) agreement, so the country does not owe in the project, but the two countries companies are fully responsible for the projects.
“There are those who commemorate the bad debt trap, but we do not use the G-to-G scheme, but business to business, which is very good for reducing the trap and risk of debt from the state budget,” he revealed.
in the summit opening remarks, Chinese President Xi Jinping pledges that China would ensure the financial sustainability of the initiative’s projects in the future.
“Everything should be done in a transparent way, and we should have a zero tolerance for corruption,” Xi said.
He also said that he would open domestic markets, make financing of the country’s overseas investments more transparent and ease import and customs barriers. He then signal a recalibration of BRI as he sought to mitigate foreign critics who blame Beijing for pushing excessive lending onto developing economies.
Written by Daniel Deha, Email: email@example.com