Maluku, China, And Prabowo: What To Expect? – OpEd


On February 14, Indonesia held a heated presidential election involving Prabowo Subianto, Anies Rasyid Baswedan, and Ganjar Pranowo. After his fourth attempt, Prabowo, as predicted by several quick counts, could take his chance by getting over 50% of the total votes. His vice, Gibran Rakabuming Raka, who has been a “Nepo Baby” and the son of President Jokowi, was forecasted to be the biggest factor in Prabowo’s win. Among Ganjar and Anies, Prabowo committed to continue Jokowi’s policy. He says his commitment multiple times since massively during the presidential debates. 

Downstream projects, one of Jokowi’s priorities, have been discussed as an issue, mainly in Maluku, due to the biggest nickel industry supported and financed by China. Prabowo will increase its attention to this project. Briefly, the project involves extractive ventures that could increase the added value of the mining sector, ranging from coal to nickel. President Jokowi also believes that it could amplify Indonesia’s economic growth. It is in line with Indonesia’s vision for 2035. President Jokowi assures Indonesia needs more than 59 million tons of sulfate nickel to be a player in electric vehicles in Southeast Asia and the world. 

Based on the Central Bureau of Statistics, in the second quarter of 2023, Maluku’s economic growth could reach 23.89%. It was five-fold or far from the national growth. For example, In 2022, the Indonesian Investment Coordinating Board noted that the total investment in North Maluku could reach USD 9.8 billion or nearly Rp 150 trillion. 

China has been involved in this project. In the past few years, PT Halmahera Persada Lyhend (PT HPL) or Harita Nickel officially announced one of the gigantic nickel sulfates for building the electric vehicle industry on Obi Island, North Maluku. PT HPL has been owned by Chinese ventures such as Lygend Resources Technology Co. Ltd at 36.9%, a venture of global value chains since 2009 in Zhejiang, China, and Kang Xuan Pte Ltd at 18%. It has aligned with Indonesia Weda Bay Industrial Park (IWIP) or Weda Bay, which Thingshan Group dominated at 51.2% of the total share. For the rest, it has been owned by Indonesian ventures PT. Aneka Tambang Tbk and Antar at 10% and Eramet (France) at 37.8%. 

Several of those companies were also buoyed by Contemporary Amperex Technology Co Ltd (CATL) – China-backed – that built some facilitations of cultivating nickel fabrics to sulfate nickel in East Halmahera, North Maluku. The project is estimated to finish in 2026. In addition, the total CATL investment in Maluku could be worth USD 5.6 billion. 

In 2023, for the first time, PT HPL announced exporting 5.584 tons of sulfate nickel to China via 290 containers. However, the senior researcher of the Institute for Development of Economics and Finance (INDEF), Faisal Basri, argues the projects are not for Indonesian but for China. He criticizes that over 90% of the results are enjoyed by the Chinese, not Indonesia. 

Prabowo’s Steps and the Impacts

Prabowo will likely continue that downstream project by increasing his talks significantly with China. Luhut Binsar Panjaitan, the coordinating minister of maritime affairs and Prabowo’s senior during TNI AD, argues Prabowo is committed to bringing Indonesia’s economic development by copying Jokowi’s path. If this scenario occurs, severe implications could happen in Maluku. 

First, although BPS reported it could accelerate Indonesia’s growth, apparently, the nickel could worsen poverty. Compared to March 2022, BPS released a report showing that the poverty index in North Maluku mounted to 1.083 in March 2023, an increase of more than 50 points. However, the government of Maluku could not decrease or lessen the Gini Index from 0.3 to 0.289. Due to these facts, certain groups and elites could only enjoy the downstream rather than the original people. 

Second, there are environmental effects. The activist of North Maluku, Upiawan Umar, said the waterfall and Toduku River are contaminated by disposing of nickel ore. Despite being polluted and dirty, the people of Maluku are still using the waters due to a lack of ability to purchase clean water. 

Ake Lamo River, the biggest river in Obi Island, has also had an impact. Jatam, the mining advocate, released a report showing that not only does water get the impact, but Jatam notes the people also breathe “the deadly air” resulting from Harita Nickel. The Public Health Office of Maluku said in 2023, 520 cases of diarrhea and respiratory infections caused death. Ironically, most of its victims are children and babies below four years of age. 

In conclusion, if Prabowo desires to continue the downstream projects in Maluku, he could and must read academic articles or some reports about the impacts of the projects. It may be attentive to the people and could warrant dirty investments. Quoted from Kompas, Romo Herry Priyono, the lecturer at STF Dtiyarkara, said if the government wants to improve economic development, the first task they could do is to improve the quality of life of its people. 

M Habib Pashya

M Habib Pashya is a Master's student at Universitas Gadjah Mada (UGM). His research focuses on China's foreign policy, Indonesia's foreign policy, and US-Taiwan-China relations.

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