Why Indonesia Should Avoid Chinese Investment in Nusantara
Indonesia’s ambitious plan to build its new capital, Nusantara, is a landmark project that promises to reshape the country’s future. Moving the capital from Jakarta to East Kalimantan on the island of Borneo aims to reduce congestion and environmental stress on Jakarta.
As the government seeks international investment to support this undertaking, some have suggested that China could be a key partner. However, there are significant reasons why Indonesia should avoid Chinese investment in Nusantara and look to other partners.
1. Debt Trap Diplomacy Concerns
China has become known for its “Belt and Road Initiative” (BRI). While the BRI has led to significant investments in countries across Asia, Africa, and Latin America, it has also sparked concern about debt traps.
Countries like Sri Lanka and Zambia have found themselves heavily indebted to China after accepting large infrastructure loans, leading to a loss of sovereignty over critical assets. In the case of Sri Lanka, failure to repay a Chinese loan resulted in the leasing of the Hambantota Port to China for 99 years.
Indonesia, should avoid dependency on Chinese funding. Relying on Chinese loans for the development of Nusantara could place the country at risk of falling into a similar debt trap, where financial obligations to China could compromise Indonesia’s autonomy.
2. Environmental Concerns
One of the central goals of Nusantara is to promote sustainable development. The move to East Kalimantan is partly motivated by the need to address Jakarta’s environmental challenges, including flooding and pollution. However, China’s track record on environmental sustainability in its infrastructure projects has been mixed at best.
Chinese-funded projects in other countries have faced criticism for their environmental impact, from deforestation to pollution and displacement of local communities.
With the sensitive ecosystem of Borneo at stake, it is critical for Indonesia to partner with nations and companies that have strong environmental safeguards in place.
Chinese investment may not prioritize the environmental standards that are essential to Nusantara’s long-term sustainability.
3. Geopolitical Tensions and Independence
Accepting large-scale Chinese investment in Nusantara could also complicate Indonesia’s foreign policy. Indonesia has historically maintained a non-aligned stance in global geopolitics, seeking to balance relationships with major powers such as China, the United States, and Japan.
However, a heavy reliance on Chinese capital could shift this balance, making Indonesia more vulnerable to Chinese influence in its political and economic decisions.
China’s growing assertiveness in the South China Sea and its expanding influence in Southeast Asia have raised alarms in many neighboring countries, including Indonesia.
By allowing China to play a significant role in developing Nusantara, Indonesia risks compromising its independence and becoming overly reliant on Beijing’s goodwill.
Maintaining control over the project and its financing is crucial for Indonesia to preserve its sovereignty and diplomatic freedom.
Nusantara presents Indonesia with an opportunity to build a capital that is not only a symbol of national pride but also a model for sustainable and inclusive development. However, the allure of Chinese investment must be weighed against the potential long-term risks.
Debt trap diplomacy, erosion of local jobs, environmental concerns, geopolitical complications, and technology transfer issues all point to the conclusion that Indonesia would be better served by seeking investment partners who prioritize transparency, sustainability, and Indonesia’s long-term growth.
By diversifying its investment sources and ensuring that local interests are protected, Indonesia can build a capital that truly reflects its vision for the future—one that is sustainable, independent, and innovative. Avoiding Chinese investment in this critical project may be the key to safeguarding Nusantara’s success.
