Corporate Japan lost high speed railway construction project to China in Indonesia



A lot of observers are wondering why Indonesia selected China over Japan last year to build a 142.3 kilometer high speed railway (watch this clip, it is really cool) worth US$5.5 billion by PT Kereta Cepat Indonesia-China, a joint venture between an Indonesian consortium of four state-owned companies and China Railway International Co. Ltd.? Indonesia broke ground January 21, 2016 on this joint project with China to build Southeast Asia’s first high speed rail service, linking Jakarta with Bandung in West Java. Corporate Japan longs to build infrastructure for Asia under Abenomics but Japan’s officials last year were quite despondent after what looks like “China gatecrashing Tokyo’s long-nurtured plan to export the Shinkansen high-speed railway to Indonesia.” Will Jarkarta offer Japan better deals in the future? Let us hope so. After all, we want “co-prosperity” don’t we? This also comes on the heels of the US selecting China to build a high speed railway in California. Talk about a double blow to corporate Japan?

That must have really blew the wind out of Japan’s corporate elite’s sails. Not to worry though because Japan has acquired the contract from India to build a high speed railway in that country. Is this being “co-prosperity” fair? No wonder there is bad economic blood between Tokyo and Beijing? The other reason I suspect Japan lost this contract for a high speed railway in Indonesia has to do with the loan arrangements. The Japanese financing package “relied on a cheap bilateral loan, while China’s bid on the project to build the railway from Jakarta to Bandung without a loan guarantee from Indonesia’s government”. My guess is because this construction project is based on the third largest gold mine in the world with gold estimates placed at 16,000 tons is in Indonesia. One problem though, it is owned by Freeport McMoRan. How does that work out? The third largest gold mine in the world owned by an American corporation? Freeport McMoRan has had “Rockefellers, Whitneys, Stillmans, Goodrichs and Lovetts on its board, and is one of the most influential of global US corporations. It got control of the mining rights for Grasberg in the usual way for such giant US mining multinationals—by hook and crook, fraud and bribery” as we’ll see.

Source: New Eastern Outlook

Indonesia, China, Gold and ISIS

February 14, 2016

by F. William Engdahl

45345354At first glance it’s a strange title for an article. What does Indonesia, China, Gold and the Islamic State or ISIS have to do with one another? That might begin to become clearer when we look more closely at the foreign economic policy actions of the Indonesian government of President Joko Widodo.

On January 14, an Indonesian terrorist group connected with ISIS in Syria claimed responsibility for a series of suicide bombings and terror attacks in Jakarta, killing two civilians and ending in the death by police of five terrorists. The attackers apparently were not the most professional. The first was a suicide bomber who entered a Starbucks café, detonated the device killing only himself, along perhaps with a few thousand calories worth of Starbucks muffins and cups of Latte. The terror attacks were the first in Indonesia since 2009.

Now, if we take the basic fact that all major international terrorist organizations must have at least one or more state sponsors to remain in existence, and that the blood from ISIS atrocities lies on the hands of the CIA, the Turkish government of Recep Erdogan, and on Saudi King Salman and his princeling Salman, with some drops finding their way to the hands of Israel’s Netanyahu, we must ask what it is that suddenly, after a calm of almost seven years, makes Indonesia a terror target?

China and Jokowi

Joko “Jokowi” Widodo, Indonesia’s president, who was voted in October 2014 for his appeal as a clean, new face in the traditionally corrupt Indonesian politics, has followed a mixed course, seemingly trying to be friends with all, at least in foreign relations.

To please Washington he agreed to the disastrous Trans-Pacific Partnership trade swindle. He backed Obama’s agenda on the fraudulent Global Warming. But he also has taken very concrete steps to improve relations with China, and here is where it becomes interesting.

Since a CIA-backed military coup in the late 1960’s, Indonesia has had a mixed relationship with Beijing. The CIA backed a military coup in 1967 to oust the nationalist leader of the revolution that overthrew Dutch rule, Sukarno, placing in power General Suharto, whose army launched mass slaughters of hundreds of thousands of pro-Chinese communists. With the US-backed coup regime of Suharto, diplomatic ties to Beijing were cut, a state of affairs lasting until 1990. The Suharto coup had a lot to do with controlling Indonesia’s oil and locking her into America’s Asian sphere of influence.

Today Indonesia, under the populist Jokowi as he is called, is concerned with developing the nation economically. That, in today’s Asia, inevitably means working with China. And this is precisely what Jokowi has been also doing.

Financing Major Infrastructure

Over the past decade, Indonesia trade with China has assumed growing importance. In November, 2014, newly elected President Joko Widodo paid his first official overseas visit. It was to China where he met with China President Xi Jinping and Prime Minister Li Keqiang. Then in April 2015, President Xi Jinping met in Bandung with Jokowi at the commemoration of the 60th anniversary of the Asian-African Conference.

By 2010, China had overtaken the US as Indonesia’s second-largest export destination after Japan. China has also become Indonesia’s most important source of imports. Now, under Jokowi, Indonesia has recently turned to China to finance major domestic infrastructure projects to link the most important of the country’s thousands of islands.

Last October, Jokowi’s government announced that it had decided to accept China’s revised offer to construct a major high-speed rail linking Jakarta to Indonesia’s third-largest city, Bandung. China beat a rival Japanese bid for the project, to cost an estimated $5-6 billion. The railway will be completed by 2018.

The Jakarta-Bandung rail project is a part of President Xi’s economic diversification strategy of focusing high-tech China companies on developing export markets and also of developing the needed infrastructure along China’s One Belt, One Road routes across Asia and Eurasia. Good relations with Indonesia is also important for China in developing stronger ties with the ASEAN countries of southeast Asia, where Washington is hard at work trying to stir friction against China’s presence in the islands of the South China Sea.

For the Jokowi government it’s clear that they see China as the essential partner in helping meet the goal of a vast infrastructure investment plan. Japan is de facto bankrupt.

The Jakarta government needs to invest an estimated $740 billion in the coming five years for infrastructure development projects to achieve the targeted 7%-a-year growth in its economy. The government expects 5.8% growth this year, lower than the 6.3% target. Jokowi has also requested Chinese president Xi Jinping increase involvement of Chinese state companies in developing Indonesia’s infrastructure. He also proposed a bigger role for Indonesia in the China-led Asian Infrastructure Investment Bank (AIIB).

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