How a Gulf Prince Charmed Jokowi and Poured Money Into Indonesia

How a Gulf Prince Charmed Jokowi and Poured Money Into Indonesia image
During a visit last summer where he strolled through the tropical gardens next to Indonesia’s summer Presidential Palace, Abu Dhabi’s crown prince offered to build a grand mosque for his host, Joko Widodo.
If that seemed like a generous gesture, the two men struck a bigger bargain within months, appointing the de-facto ruler of the United Arab Emirates to chair the steering committee for a new $34 billion Indonesian capital city.It was a strategic match. Jokowi, as the Indonesian president is known, is eager to find investors in an ambitious $400 billion infrastructure program. Sheikh Mohammed bin Zayed Al Nahyan is looking to expand his country’s presence in fast-growing Asian markets. But there’s more to it than that.

Since meeting during Jokowi’s Middle East tour five years ago, the two leaders have become firm friends, forging one of those rare personal relationships among world premiers that extend beyond economic cooperation and can redraw the map of political alliances. As Jokowi’s investment minister Luhut Pandjaitan put it, the two leaders have come to refer to one another as “brothers.” That relationship is creating an important new piece in Southeast Asia’s complex geopolitical puzzle as the U.S. reduces its presence in the region and nations look for partners to offset the growing influence of China. The oil-rich Gulf state offers Indonesia an alternative to Saudi Arabia, its primary Middle East trading partner -- one that may be more in tune with Jokowi’s political goals.

Indonesia is home to the world’s largest population of Muslims. Of the nation’s 265 million people, 225 million follow Islam and most are Sunni, the branch of the religion that predominates in the U.A.E. and Saudi Arabia. Both Jokowi and Sheikh Mohammed are considered moderates, opposing the influence of political Islam that holds sway in some parts of the Muslim world. The two nations have similar values when it comes to religious tolerance and the need for tough measures to combat terrorism, a U.A.E foreign ministry official said. Sheikh Mohammed’s personal touch is one reason for the strong ties between the two leaders, with Indonesia’s cabinet secretary Pramono Anung recalling the prince’s sense of “intimacy,” including his lunch with Jokowi at a public venue. Indonesian officials were also impressed by the U.A.E.’s willingness to pursue agreements. Days after Sheikh Mohammed, chairman of Abu Dhabi’s $232 billion Mubadala Investment Co. wealth fund, offered to build the mosque, officials arrived to scout out sites.

In July 2019, it was Jokowi’s turn, hosting Sheikh Mohammed at the 19th century palace in Bogor, a city on the outskirts of Jakarta. The two walked in the botanic gardens and rode round together in a limousine. Companies from both sides worked $9.7 billion in deals that were among 12 cooperation pacts signed in industries from tourism to gas. As the leaders’ relationship strengthened, so did the economic ties between their countries. On Jan. 12, the U.A.E. committed to pumping $22.8 billion into Indonesia’s fund for infrastructure projects, including energy deals between the Abu Dhabi National Oil Company and Indonesia’s Pertamina and Chandra Asri. A day later, the crown prince was named chair of the panel that will steer the development of Indonesia’s new capital, possibly the world’s most ambitious urban project.
Jungle Capital
Jokowi aims to build a city of 7 million people in the jungle on Borneo Island, more than 1,200 kilometers from the current seat of government in Jakarta. The steering panel also includes SoftBank Chief Executive Officer Masayoshi Son and former British Prime Minister Tony Blair. Jakarta’s problems are undeniable. It’s overcrowded, with as many as 35 million people living in the vast conurbation that extends around the city. It’s also at risk of inundation from rising sea levels. The new capital would be in the province of East Kalimantan, an area rich in coal and gas reserves, where palm oil plantations have yet to replace thousands of square kilometers of rainforest.

Since announcing the plans in August, Jokowi’s government has held a competition for a design and plans to begin construction this year. The central government is expected to relocate within five years. Details of the investment fund still need to be finalized through Indonesia’s parliament. This has been delayed because of the coronavirus pandemic, but should be able to move forward in the coming weeks, said Husin Bagis, Indonesia’s ambassador to the U.A.E. For the U.A.E., which is looking to diversify its economy and build on its role as a global trade and logistics hub, populous Indonesia offers both a major investment opportunity and a gateway to Asia.

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