Indonesia Stake in China’s One Belt One Road
We all have heard of the ancient silk road, and how it used to be one of the busiest routes which connect East and West in the past. China used to depend heavily upon it for international trade, and it is trying to revive it again. The initial plan to revive the silk road was unveiled in 2013 by the Chinese Government. This is the third and final article in the One Belt One Road series by Kargo. In the first article, we discussed the key details such as who are the 65 countries involved and which are the key routes connecting Europe to China as well as Africa to China through Southeast Asia. In the second article, we briefly addressed the economic, social and political impact of this initiative, which can be seen here.
In this article, we would discuss about Indonesia’s involvement in the One Belt, One Road mega project as well as how it could potentially benefit from it.
How is Indonesia involved?
Indonesia plays a very critical role in this mega project. By being in Southeast Asia, its island of Sumatra falls under the route plan for the One Road (Which is the new Maritime Silk Road). The New Maritime Silk Road seeks to connect China, Africa as well as the Mediterranean region through Southeast Asia. The main countries along this route are Indonesia, Malaysia as well as Singapore. All three countries also happen to be of close proximity, therefore making it more significant in the region.
How will Indonesia benefit?
According to a report by ASEAN Connections, Indonesia would first of all get an increase in infrastructure by having around 85 billion dollars pumped in. Furthermore, the mega project is said to make Indonesia the biggest beneficiary in Southeast Asia, due to the increase in investments and trade which is foreseen by the report. Furthermore, with other trade initiatives such as the Trans Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP), the improved connectivity and ease to conduct trade would boost Indonesia’s economy. Indonesia has been a member of the One Belt One Road initiative, and till date, it has received about 6 billion US dollars in investment. Currently, the Indonesian Government is planning to include regions like Aceh, North Sumatra as well as Pontianak in West Kalimantan, it also notes that it has several airports, sea ports, tolls and transport connections which are in line with the One Belt One Road initiative. As such, increasing its confidence that Indonesia would be able to reap the benefits from this mega project.
In Conclusion
Indonesia, being a key location in Southeast Asia, could be a great beneficiary when the initiative has been fully implemented, primarily due to the increase in trade as well as investments that could boost the economy. Furthermore, considering the fact that Indonesia already has some key infrastructure developments like airports, sea ports, tolls and roads, it would be matter of time before the the rewards could be reaped.
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