Indonesia’s Minister of Energy and Mineral Resources, Bahlil Lahadalia, has shocked Singapore by saying Indonesia will stop exporting energy to Singapore if they fail to reach an agreement. Bahlil said Indonesia will prioritise domestic needs if Singapore cannot meet the price the Indonesian government intended. Singapore would lose around 3.4 gigawatts if the deal collapsed; however, Bahlil Lahadalia said both countries are working hard to ensure the deal still goes ahead. Nonetheless, the news has triggered anxiety in Singapore, as the city-state relies heavily on its neighbours to meet its basic needs.
Who is Bahlil Lahadalia?
Bahlil is famous as Jokowi’s loyalist. He started his political career as the head of the Young Entrepreneurs Association of Indonesia from 2015 to 2019. He was heavily involved in helping President Jokowi’s second-term campaign. Later, he was appointed head of the national investment plan. He then continued his career by getting the number one position in Golkar, the third-largest party nationally.
Though his career looks promising, he is always a divided personality. He controversially earned a doctoral title from the University of Indonesia amid plagiarism and unethical academic practices, and his title was later revoked. He is also known for a policy to stop the distribution of 3 kg gas cylinders, which are important to the livelihoods of low- to middle-income groups, causing riots and forcing people to stand in line for hours to get the gas cylinders; in the process, someone died trying to get them. People are also criticising him for showing his biased loyalty to Jokowi, though the once-beloved president has caused several controversies that hurt democratic supporters of the country.
Will the Electric Deal Collapse Because of Bahlil Lahadalia
Despite the controversies, Bahlil is a logical entrepreneur who chose to be pragmatic. The electric deal is a huge economic profit for Indonesia. The project can help the country, which is fiscally struggling under populist policies with no clear impact on economic growth, such as the free-lunch program (MBG) and the Village Cooperation Institution (KopDes).
The minister seems to play hard because of political contention between the two countries, with Singapore among those that have repeatedly criticised Nusantara’s wildfire policy, which has polluted Singapore’s air quality over the past several months. Moreover, Bahlil is famous for being a strong negotiator; therefore, he is apparently trying to improve the terms of the contract.
Another reason is that the archipelago country needs to protect its national energy security. Several areas in Indonesia have reported extensive blackouts. Indonesia is also facing difficulties obtaining fossil fuels due to protracted wars in the Hormuz Strait that hamper imports of crude oil and gas.
For now, Indonesia is still in the early stages of developing its clean energy sector. However, the current administration appears uninterested in prioritising clean energy programs, since social assistance programs are seen as politically more beneficial for now, leaving the archipelago facing serious energy security challenges.
Will Indonesia v. Singapore End in a Happy Ending?
The chance is huge since both countries actually depend on each other. Yet the relationship will face turbulence, as President Prabowo’s more nationalistic approach could trigger tensions between the two countries. Though he never mentioned Singapore openly, Prabowo mentioned ‘antek asing’ (foreign enemies) who have kept Indonesian money overseas.
Many people believe Prabowo has been talking about the Merlion’s role as the headquarters and financial safety net for several of Indonesia’s top companies. Nonetheless, Prabowo, who is the son of the nationalistic socialist figure Soemitro Djojohadikusumo, does not see the importance of being realistic in business terms since he wants to focus on nationalistic interests more than ever. This makes negotiations with other countries tricky and generates controversy over Indonesia’s foreign policy.
Blaming Singapore is unfair, since many of the national tycoons have realised that Singapore offers more security and certainty than corrupt, politically unstable Indonesia. Yet, this perspective is not shared by Prabowo, who in this case eyes the possibility of moving some of foreign money back to the country to stimulate economic growth in Indonesia.
