<Special Focus>Political Dynamics of Foreign-Invested Development Projects in Decentralized Indonesia: The Case of Coal Railway Projects in Kalimantan

Abstract

Resource-rich Indonesia has been promoting massive infrastructure development projects involving billions of dollars in the aftermath of the Seoharto era. One area of intense focus is in Kalimantan which required infrastructure development for extractive industries, particularly coal. Since the early 2000s, the central and local governments as well as foreign companies have been interested in embarking on the first-ever railway construction projects for transportation of coal in Kalimantan. However, the projects have experienced several setbacks including changes to its original plans and delays to approvals. This paper explores the reasons why the local development projects could not progress smoothly from a political viewpoint. It argues that Indonesia's democratization and decentralization have brought about unremitting struggles over power and resources among local political elites. Sometimes national politicians and even foreign investors are embroiled in the struggles of the local leaders when venturing into such development projects. The coal railway projects in Kalimantan highlight how local government leaders deal with the central government and foreign investors in their attempt to secure their position politically and financially in the venture, which would give them an edge over their rivals. This paper reveals the strategy of local power players who project themselves as defenders of local communities and the environment although a gap exists between their rhetorics and the realities on the ground in Kalimantan.