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Indonesia must “watch out” when doing business with Chinese corporations, an anti-corruption agency has warned

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“We advise the government to be more careful with investments from China,” said Laode Muhammad Syarif, vice-chairman of the Anti-Corruption Commission. “They are doing this as part of their business, trying to increase their economic influence, so we have to be very, very careful.”

As belt and road investments flow into Indonesia, Chinese corporations must learn to address culture shock

With bilateral trade increasing 22 percent to $72.3 billion in 2018 in comparison with the previous yr and increasing foreign direct investment, China is already a key economic partner for Indonesia. At the identical time, comments from the Anti-Corruption Agency, including: generally known as KPKindicate Indonesia’s fundamental concerns about Beijing’s political and economic ambitions.

While Chinese corporations are “vital investors,” Indonesia should “be more careful,” Syarif said.

The KPK anti-corruption agency is doing a superb job. So why is Indonesia weakening its power?

For Indonesian President Joko Widodo, who began his second and final five-year term in October, relations with China require a fragile balancing act. As the federal government continues to struggle for revenue – the situation has been made worse by the worldwide economic slowdown – billions of dollars Cheap financing from Beijing is difficult to withstand.
Indonesian President Joko Widodo is reviewing a bullet train model that may connect Jakarta with Bandung. Photo: AP
China is the primary to support Indonesia high speed railway between Jakarta and Bandung city. But the $6 billion project has already raised questions on transparency amongst those near Widodo, and China’s growing economic footprint could also create the impression that Indonesia is becoming too indebted to Beijing.
Last week, Australia’s ambassador to Indonesia, Gary Quinlan, expressed a cautious tone on the Chinese telecommunications giant’s presence Huawei in Indonesia would impact intelligence sharing with its northern neighbor. The Trump administration also warned allies to not let the corporate play a task in constructing next-generation 5G cellular networks.

“We are talking to Indonesia behind closed doors about all security issues affecting the region or the world, but we are particularly concerned about cybersecurity and the whole new digital world we face,” Quinlan told reporters in Jakarta.

Should China worry about Indonesia’s recent Defense Minister Prabowo Subianto?

Asked specifically whether this might have an effect on Australia’s willingness to share intelligence with Indonesia, he said: “We will only comprehend it after we learn about it.”

Corruption has been an endemic problem in Indonesia for many years. The anti-corruption commission, whose legal remit only covers investigations of high-level officials and cases involving illegal payments of 1 billion rupees ($70,000) or more, has overthrown judges, members of parliament, regional governors and government ministers.

The situation is getting worse, Syarif said, citing Transparency International’s latest corruption perception index, which scored Indonesia just 38 out of 100 from 32 in 2012, showing little improvement during Widodo’s first term.

What is causing Indonesian paranoia towards Chinese employees?

“It means we are still a very corrupt country,” Syarif said.

Syarif, whose four-year term as vp ends on December 20, also urged Jokowi to repeal an amendment to the law that weakens the anti-corruption agency’s powers. The amendment, passed by parliament in September, was widely condemned by human rights groups on the time and sparked deadly street protests within the capital, Jakarta.

“If they want to attract investment, they need to strengthen the NCP,” he said. “But they do the opposite.”

This article appeared within the print edition of the South China Morning Post as: Warning against Chinese investments

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