Cannot Accept Defeat

The government of Indonesia announced that it would introduce high-speed railway system between Jakarta and Bandon from China. Japanese bullet train, Shinkansen, was dropped in the competition. Since the deal offered by China was actually unrealistic, requiring no financial burden from Indonesian government, Japanese government rejected recognition that Japan was a loser. The fact is, however, that Japan lost a crucial business opportunity which was also important in terms of international relations in Southeast Asia.

In the competition on Jakarta-Bandon Train, Japan and China were final candidates to export their high-speed train system. But, both offers were simultaneously dropped, because the cost for construction was too expensive for Indonesia. Indonesia announced that it changed the plan to semi-high-speed train with max speed of less than 250km/h. It is likely that China has still been seeking the deal with Indonesia, while Japan gave it up holding its offer with Japanese yen loan to Indonesian government.

The decision of was announced from State Minister for National Development Planning, Sofyan Djalil, to Japanese Chief Cabinet Secretary, Yoshihide Suga, in Tokyo on Tuesday. In his press conference on Tuesday, Suga looked frustrated with the issue being called Japan’s defeat. “It is rather than being defeated…because that was completely unbelievable for Japanese government, asking no financial burden or debt guarantee to Indonesian government,” told Suga to the press. Suga said that he expressed regret to Sofyan in the meeting.

Even how Japan accuses Indonesia, it lost a deal valuable for several trillions yen in a country with the fourth greatest population in the world. China tried hard for building bridgehead on a highly potential market at any stake, offering technology transfer, development of train building factory in Indonesia and construction of aluminum refinement factory necessary for making train body. Although necessity of imagining unpredictable was a lesson of Great East Japan Earthquake, Japanese government again failed in doing that.

The defeat may affect economic policy of Shinzo Abe administration, which has been focusing on exporting infrastructure. Japanese companies realized competitiveness in price of Chinese infrastructure. It will be important for Japanese infrastructure to take advantage of rich experience in foreign market, good reputation for quality or safety and fast construction within a set period. But it is unclear whether Japan brand can always meet demands of clients.

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