Indonesia’s high-speed train project connecting the country’s capital Jakarta and West Java’s capital, Bandung, has encountered another stumble. Following accidents, including one in December that claimed two lives, the China-backed project has hit financial problems. As a result, the cost of the project has swelled by US$ 1.2 billion from the original forecast of $6 billion.
China has asked Indonesia to guarantee to cover the swelling budget.
As researchers focusing on China-Indonesia relations, we suggest the Indonesian government reject the request to avoid detrimental consequences for the country’s economy. Indonesia must learn from Malaysia’s success story in renegotiating project debts financed by China in 2016.
