Mr Tanaka in Indonesia

Press, Volume CXIV, Issue 33433, 15 January 1974, Page 12

Mr Tanaka in Indonesia

Political and economic penetration by Japan in South-East Asia follows a recognisable pattern. The politicians visit and discuss trade relationships; assertive businessmen, with large sums for investment quickly follow to work out details. The visit to Indonesia this week by the Japanese Prime Minister (Mr Tanaka) is being treated by Indonesian students as an example of Japan's “ economic imperialism ”. Some students demonstrated angrily a week ago when Mr Tanaka was in Thailand; protest in Indonesia is likely to be at least as serious. Japan is the largest foreign investor in Indonesia, particularly In the development of oil and natural gas, of which Indonesia has considerable known reserves. Japan is a major member of an international consortium which is helping to draw up energy development plans, and Japan is expected to take much of the fuels produced

In mid-1973 131 Japanese firms were operating in Indonesia trading jointly with Indonesian firms. This was fewer than the Japanese connections in Singapore, Hong Kong and Thailand. But if an acceptable relationship can be established between Djakarta and Tokyo — one of the objects of Mr Tanaka's visit — Japanese participation will be greatly increased. The Japanese consider that Indonesia, with 130 million people and great and diverse resources, has an unsurpassed economic potential in the region. But development arrangements with foreign countries are approached with caution in Djakarta. Indonesia’s State oil corporation, Pertamina, is thought to be gambling on the extent of oil reserves not yet proven by investing on a very large scale. Pertamina hopes that the investment will pay off or that, in the meantime, its income will be large enough to pay for an alternative source of energy if Indonesia’s reserves fail. Such a policy is highly speculative. Many Indonesians believe that the production pattern is being determined by Japanese and, to some extent. American needs rather than the needs of Indonesia.

Indonesia recognises that large-scale foreign investment is necessary, but the country will not let itself be further caught up in Power politics. President Suharto’s very able Foreign Minister (Mr Malik) has no illusions about close involvement with either Japan or the United States. Mr Malik said in a recent interview that there was an immediate need to balance Japan’s role in Indonesia’s economy. “ We " must protect ourselves from the Japanese he said. “In seeking their co-operation we must lay -down the long-term basis, and let the Japanese “ know the limit — how far they should be allowed “ to go, and how much they should be given ”. Mr Malik will not be deceived by Japanese blandishments: nor will he be overwhelmed by brash assertiveness in business dealing.

Indonesia and some of the other South-East Asian countries included in Mr Tanaka's tour have had some essential imports from Japan — raw plastics and chemical fertilisers, in particular — reduced because of the shortage of oil and of products based on oil. While this must be an incentive for the Indonesians to develop their energy resources even faster, Japan’s bargaining position must have been weakened by its failure to deliver the goods which Indonesia needs now. Student demonstrations in Djakarta might turn out to be the least of Mr Tanaka's problems.