From New Eastern Outlook, by Dmitry Bokarev
It should be noted that today’s cooperation between Russia and Indonesia is rapidly developing, just like the ties Moscow establishes with other countries of the ASEAN region. Among common business interests of the two above mentioned states one can name arms supplies, energy and transport infrastructure development. Among the most successful areas of Russian-Indonesian cooperation one can mention the reconstruction of the Indonesian railways, which has been carried out by Russia’s major player in this area – the Russian Railways company (RZD).
Indonesia – is an island nation, nevertheless for its economy to boom it has to develop its rail infrastructure. Therefore, Indonesia’s political elites are counting on Russia’s expertise in this area, since they appreciate the experience and technologies that RZD possess. Ever since 2014, Russia has been keeping a quota of 50 students from Indonesia to be admitted to its railway universities. In November 2015 the start of large railway construction works was announced in the Indonesian province of East Kalimantan, supervised by PT Kereta Api Borneo (a local subsidiary of RZD). Denis Muratov, who heads the company, announced that it was tasked with building a sea port and a transshipment complex in the Balikpapan Bay, along with over 120 miles of railways, which would connect the internal regions of the island. Furthermore, RZD has decided to ship up to 40 engines and 1100 cars to Indonesia for this specific railway.
The project is of particular importance for Indonesia since the above mentioned strip of railway will allow the unhindered transportation of export goods from all over the East Kalimantan province, which is rich in all sorts of resources, to the port of Balikpapan Bay. The coal transportation is of particular importance, since Indonesia’s coal industry has been driving its economy forward, which is not surprising, since the country can be found on the list of major local coal exporters. Moreover, back in 2014 the country ranked second in the whole world. According to representatives of PT Kereta Api Borneo, once the new port becomes fully operational, it would allow the shipping of up to 30 million tons of coal per year, not counting other important commodities such as palm oil and timber. These number mean that the port will pay itself off in five to six years of its operations. The project cost was announced to be at the level of 2.5 billion dollars, and it will provide up to 300 thousand Indonesian citizens with jobs, should the project be successful implemented.
It is noteworthy that a particular attention in the course of the construction has been paid to environmental concerns. The Kalimantan Island is pretty unique in terms of its flora and its fauna, since the better part of its territory is covered by jungles that that are home to a great many of unique species and plants, some of which remain unknown to science to this very day. According to the data presented by PT Kereta Api Borneo, it is going to employ environmentally friendly means of transportation for the first time in Indonesia’s history. The project is going to use an extensive amount of cutting edge technologies, both Russian and Western, including solar power generators, as well as modern ways of processing and bracketing the coal, developed in South-East Asia.
In January 2016, Indonesia’s capital was visited by the Russian Industry and Trade Minister Denis Manturov, who also co-chairs the Russian-Indonesian commission on trade and economic and technical cooperation. He was received by the Indonesian President Joko Widodo along with a number of key figures of the Indonesian government. Among other issues, an extensive amount of attention was paid to Kalimantan railway project, since Russia has been providing loans to Jakarta for this project to succeed.
Among the main investor of the railway project, Russian Railways retains special rights to it. Thus, through the construction of the railway Russia receives some influence in the Indonesian economy. At the same time representatives of PT Kereta Api Borneo don’t stop reminding everyone that the investments will pay themselves off in less than a decade. It is also been reported that in case the project sees its successful completion, Jakarta may allow RZD to build other railway strips in its territory, with a total length of up to 2,5 thousand miles.
In October 2016, the head of the Russian Railways Oleg Belozerov made a working visit to Indonesia. There he held meetings with a number of high-ranking Indonesian officials, including the Indonesian Minister of Transport, Budi Karya Sumadi. During the talks, Indonesia’s Minister of State-Owned Businesses Rini Soemarno respectfully complemented the Russian Railways for its achievements and invited RZD to participate in the modernization of the Indonesian railway system. In her opinion, the experience of RZD must be of particular value in Jakarta’s bid improve the performance of its old railway system.
In conclusion it can be stated that the successful cooperation of railway companies of the two states is an important factor that brings the positions occupied by Moscow and Jakarta closer together. Lately, Russian-Indonesian cooperation has made significant progress in such important areas as defense cooperation and energy. If Russia is to be tasked with the improvement of Indonesia’s transportation system, Russia will enjoy stronger positions in Indonesia, and through it – in the Southeast Asia.
Dmitry Bokarev, political observer, exclusively for the online magazine “New Eastern Outlook”.