Indonesia, the “sleeping dragon of Asia”, is awakening with the redevelopment of East Kalimantan and its periphery. Being the fourth most populous nation in the world, Indonesia has great potential to increase productivity and become an economic powerhouse. With the archipelago’s abundance in natural resources (minerals, renewables and oil) and its geographical advantage for trade, coupled with efforts by the government and World Bank, Indonesia can resuscitate its economy.
Indonesia began its redevelopment with 13 special economic zones (SEZs) as of the fourth quarter of 2019. At the Asia Competitiveness Institute conference held in Singapore last year, Indonesia’s Dr Bambang Wijanarko, Secretariat of the National Council for Special Economic Zone, explained that these SEZs will serve as an incentive for businesses and aim to develop the healthcare, tourism, financial, digital, advanced technology, and education sectors. With tax deductions from the local governments and lack of limitations on importation of goods, the SEZs target to see developments to increase opportunities for Indonesians and to overcome the uneven economic distribution across the country.
To achieve its goals for economic equality, Indonesia is working hand-in-hand with the World Bank under the ACT programme – Augment, Connect and Target. The initiative aims to augment the coverage and quality of basic services, connect people to job opportunities and services as well as target marginalised groups and places that are lagging behind. The end goal is to enable prosperity, inclusiveness and liveability across Indonesia, whether in the capital or its periphery.
Additionally, Indonesia plans to move its capital from Jakarta to East Kalimantan in its efforts to lessen the environmental burden on Jakarta. Kalimantan will act as the replacement for the sinking Jakarta. It would also increase the distribution of jobs, providing more opportunities for citizens.
With the predicted growth of its economy, Indonesia continues to claim itself as the “big brother” of the Association of Southeast Asian Nations (ASEAN). The term was first coined in 2014 due to the growing strength of its military and its place as one of the pioneers of the regional bloc. However, reception to Indonesia’s self-proclaimed status by other member countries have been mixed.
As the largest market in Southeast Asia, Indonesia attracts investors from other regions. The planned redevelopment and expansion would further entice more investors, allowing ASEAN members to enjoy economic growth alongside Indonesia. Singapore, who is Indonesia’s biggest importer and has the highest number of foreign direct investment projects in Indonesia, can expect economic growth from Indonesia’s redevelopment, with increased opportunities and services for Singaporean firms.
Politically, member states may not be too keen with the position Indonesia claims itself to have. While members of ASEAN have not made public their opinions against the “big brother” concept, their interactions with the country show they take no interest nor are they willing to act according to the status.
This is evident in the never-ending discussions between Indonesia and its neighbours on the transboundary haze issue. The 2015 Southeast Asia haze saw Indonesia met with much criticism for its sluggish domestic response and rebuff of international assistance. When Singapore decided to take legal action against an Indonesian businessman for involvement in the forest fires, the island state refused petitions by Indonesia to drop the charges. This was a clear indication that Indonesia held little to no sway over its neighbours.
While Indonesia’s continued “big brother” narrative proves controversial, its regional counterparts have not publicly supported nor denounced its claims. What is certain is that they would not allow Indonesia to influence their domestic policies nor have sole control of the regional environment.
Indonesia’s big plans for redevelopment will be economically beneficial for the country and the region. However, its bid to be first among equals in ASEAN could prove to be a futile attempt. The presence of strong and sovereign neighbours within the association would see Indonesia remain on equal footing with other members, instead of the leader and protector it envisions itself to be.