Where is Southeast Asia's First High-Speed Railway Headed?
Plus largest US-Philippine maritime training; Southeast Asia's newest strategic partnership; authoritarianism in regional context and much, much more.
Greetings to new readers and welcome all to this edition of the weekly ASEAN Wonk BulletBrief! For this iteration, we are looking at:
Assessing the implications of Southeast Asia’s first high-speed rail project;
Mapping of regional developments including the largest U.S.-Philippine maritime training engagement of its kind, Southeast Asia’s newest strategic partnership and more;
Charting evolving trends such as on authoritarianism in Southeast Asia, the growth stories of Singapore and Vietnam as well as related issues;
Tracking and analysis of industry developments including China-ASEAN connectivity inroads, a new cross-border payment system and more;
And much more! ICYMI, check out our review of a new book which sheds light on Vietnam’s future foreign policy trajectory as part of a broader assessment of the country’s outlook.
WonkCount: 1,919 words (~9 minutes reading time)
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Biggest US-Philippines Maritime Training; Southeast Asia’s Newest Strategic Partnership & More
Where is Southeast Asia’s First High-Speed Rail Project Headed?
The launch of Southeast Asia’s first high-speed rail project in Indonesia with China’s backing spotlights the power of domestic political and economic imperatives in regional geopolitical competition amid evolving realities.
What’s Behind It
Southeast Asia saw the launch of the region’s first-ever high speed rail project this past week. Indonesian President Joko “Jokowi” Widodo inaugurated a line previously mentioned in these pages that runs from Jakarta to Bandung backed by Beijing under its Belt and Road Initiative (BRI). The 600-capacity train, initially supposed to cost less than $5 billion and be finished by 2019, has cost over $7 billion so far, boasts a top speed of 350 kilometers an hour and can make a one-way journey in around 45 minutes or less, compared to the previous travel time of up to three hours. The line’s name “Whoosh” is short for “Waktu Hemat, Operasi Optimal, Sistem Handal,” which in Bahasa Indonesia roughly means “time-saving, optimal operation, reliable system”.
The high-speed rail link is an inflection point both for Jokowi’s own legacy as well as China’s regional ambitions. The project has been a high-profile example of Jokowi’s focus on infrastructure during his two terms in office, the most visible manifestation of which has been the ambitious effort to move Indonesia’s capital from Jakarta to Nusantara. It was also an early datapoint in China-Japan infrastructure competition in Southeast Asia when Beijing beat out Tokyo to win the project back in 2015. China has folded the project into its BRI which was partly launched in Indonesia back in 2013, and it is the first high-speed rail success for Beijing in Southeast Asia (see table below on a list of China-linked major rail projects, with a note that the speed level of the completed Laos China railway does not quite qualify it for full high-speed status)1. More generally, Beijing has emerged as Indonesia’s leading economic partner under Jokowi’s tenure, with its trade volume doubling and its investment levels topping the charts when it had previously struggled to even make the top ten list2.
Why It Matters
For all the focus on U.S.-China competition, Southeast Asia’s first high-speed rail project shows how a domestic-focused, economic-first government mindset can prioritize short-term gains over longer-term operational or geopolitical challenges, thereby aligning target regime interests with inroads for Beijing. Close observers of the project will recall that China’s triumph over Japan for the project in 2015 was not just about the merits of rivaling proposals by Beijing and Tokyo, but also domestic political calculations within Jokowi’s government. Jokowi’s quest for quick infrastructure financing also means Jakarta has been willing to overlook challenges like cost overruns and project delays amid environmental and land concerns to keep the project going, even dipping into state funds despite an earlier pledge not to do so. These concerns have also popped up in other manifestations of Chinese influence in Indonesia like its nickel plants. For instance, a recent report on the human rights impacts of Chinese overseas investment in minerals released by the Business & Human Rights Resource Center noted that Indonesia saw the highest number of cases of alleged human rights abuses of recorded countries, the majority of which were at nickel smelters/refiners producing ferronickel and stainless steel or EV battery materials (see image below from the report).
No. of Recorded China Mineral Investment Rights Abuses
The project launch allows China to broadcast a win for its economic engagement in Southeast Asia at a time of struggle for some of its initiatives like BRI and questions about its political outlook and economic growth trajectory. Chinese state media accounts have unsurprisingly included this as a flagship project success in their BRI tenth anniversary commemorations, noting that it is the first overseas high-speed rail project of its kind that fully uses Chinese railway systems, technology and industrial components3. More generally, by one count, Indonesia has ranked as among the top countries globally in terms of BRI projects4. Chinese Premier Li Qiang also took a high-profile ride on the train last month when he represented China for the East Asia Summit meetings in Jakarta5.
Where It’s Headed
Despite the emphasis on the project’s high-profile launch, scrutiny on its future prospects is expected to continue in the coming months and past Indonesia’s upcoming elections in 2024. Indonesian officials have said this could be part of a longer train line across four provinces including the second-largest city of Surabaya. Yet the extent to which this will pan out will partly depend on how existing concerns are managed, including cost and governance (see, for example, a vivid depiction in Indonesian media below of the project as a burdensome uphill climb for the country)6. Profitability, already projected by one count to not occur until around four decades, will also be contingent upon several unknowns — including station connectivity, customer uptake, ticket pricing and the trajectory of loan repayment7. These dynamics will also play out under Indonesia’s next president following elections next February, and it is not yet clear if a future leader would adopt the same domestic-focused, economic-centric approach to China that Jokowi has. Jokowi, for his part, has been focused on future-proofing legacy projects such as the capital relocation.
Depiction of the Burden of the High-Speed Rail Project by Indonesia’s Tempo
A broader question is how China’s role evolves both in Indonesia’s and Southeast Asia’s infrastructure landscape in the coming years. On the one hand, a narrow focus on China’s inroads on the infrastructure front belies the reality that there are often few alternatives available for Southeast Asian regimes looking for quick projects to get off the ground and reinforce their own domestic legitimacy. Even countries like Japan — which per past government statistics has for instance contributed to about a fifth of all toll roads around Jakarta with 90 percent of business jobs going to Indonesians — struggle at times to compete with a more aggressive China on specific big-ticket projects8. On the other hand, seeing China’s economic inroads as a linear trajectory grossly underestimates Beijing’s ability to get in its own way while it seems to be ahead, whether it be utilizing its heft to coerce countries economically or leveraging it to make gains in non-economic realms, with a case in point being the South China Sea.
Vietnam’s Global Growth Story; Authoritarianism in Southeast Asia; Measuring Singapore’s Digital Economy
“Global manufacturers are increasingly shifting production to Vietnam and Southeast Asia due to escalating geopolitics between China and the West,” notes a new report by Golden Gate Ventures and Boston Consulting Group. The report includes a variety of graphics documenting Vietnam’s growth story, including developments involving foreign companies and the growth of the middle class in emerging cities within the country (link).
Select Recent Political and Corporate Actions Related to Vietnam, 2018-2023
“In the context of Southeast Asia’s great diversity of political regimes, authoritarian elections are not a new phenomenon, but rather the norm,” observes a new report by Heinrich Boll Stiftung on authoritarian elections in contemporary Southeast Asia. The report examines three cases in mainland Southeast Asia — Cambodia, Myanmar and Thailand — and ends with suggestions for international responses and policy options (link).
“We start from a position of strength. Our digital economy contributes a sizable 17.3% of Singapore’s GDP and is growing robustly,” notes Singapore’s first-ever digital economy report which tries to measure the size of the sector. The report, released jointly by the Infocomm Media Development Authority and the Lee Kuan Yew School of Public Policy, also looks at sectoral trends over the past few years and includes a literature review on how to measure the digital economy (link).