Minister optimistic Indonesia would escape China's BRI debt trap

Jakarta (ANTARA) - Coordinating Maritime Affairs Minister Luhut Binsar Pandjaitan is upbeat that Indonesia would not be ensnared by a debt trap emerging from China's Belt and Road Initiative (BRI).


"We have been cautioned by people over the debt trap since they apply a scheme that differs from us. We do not go for a G-to-G agreement but a B-to-B one, thereby lowering the risk of falling into a debt trap," Pandjaitan noted in a statement here on Saturday.

At the Belt and Road Forum (BRF) held in Beijing on Friday, the minister affirmed that the B-to-B scheme does not permit the disbursal of state funding for projects.

The government will solely be part of feasibility studies centering on the environment, added value, transfer of technology, business scheme, and absorption of local workforce.

"Speaking in connection with our accomplishments in Morowali, we currently have a polytechnic college for those engaged in the engineering sector. After completion of three to four years, they will be able to take the place of their foreign counterparts," he explained.

"Thus, the project will also be beneficial to Indonesian workers. This is what we term as mutually beneficial," he elaborated.

Chinese President Xi Jinping has striven to placate rising global worries over debt traps by China through the BRI, affirming it to be mere goodwill.

During his inaugural speech at the 2nd BRF, Xi voiced China's keenness on building its trillion-dollar BRI on the basis of open and clean cooperation and emphasis on infrastructure and trade projects resulting in "high quality" growth for all.

Pandjaitan affirmed that BRI will not be a threat to the global economy but rather boost regional competitiveness.

"It is clear to us all to see the European Union's expansion of the Europe-Russia connectivity plan, Russia developing the Eurasian Economic Union, and the United States having forged investment partnership with the Indo-Pacific," he pointed out.

In the meantime, the International Monetary Fund (IMF) Managing Director Christine Lagarde appealed to nations to exercise caution in response to the debt trap issue.

"If it is not managed properly, infrastructure investment will result in the creation of non-performing debt. Debt sustainability and appropriate assessment is of paramount importance," she remarked.

At the forum, held on April 25-27 in Beijing, Vice President Jusuf Kalla-led Indonesia's delegation comprised Minister Pandjaitan, Foreign Minister Retno Marsudi, Research, Technology and Higher Education Minister M. Nasir, and head of the Indonesian Investment Coordinating Board (BKPM) Thomas Lembong, who were attendees at the forum.  

Reporter: Sri Haryati
Editor: Rahmad Nasution