UCLA UCLA Electronic Theses and Dissertations Title The Geopolitical-economy of Infrastructure Development and Financing: Contesting Developmental Futures in Indonesia Permalink https://escholarship.org/uc/item/27b122p9 Author Anguelov, Dimitar Publication Date 2021 Peer reviewed|Thesis/dissertation eScholarship.org Powered by the California Digital Library University of California UNIVERSITY OF CALIFORNIA Los Angeles The Geopolitical-economy of Infrastructure Development and Financing: Contesting Developmental Futures in Indonesia A dissertation submitted in partial satisfaction of the requirements for the degree Doctor of Philosophy in Geography by Dimitar Anguelov 2021 © Copyright by Dimitar Anguelov 2021 ABSTRACT OF THE DISSERTATION The Geopolitical-economy of Infrastructure Development and Financing: Contesting Developmental Futures in Indonesia by Dimitar Anguelov Doctor of Philosophy in Geography University of California, Los Angeles, 2021 Professor Helga Leitner, Co-Chair Professor Eric Sheppard, Co-Chair In the post-2008 global economy infrastructure development and financing have risen to the top of the development agenda, emerging as a contested field for global investments involving seemingly divergent interests, objectives, rationalities and practices. Whereas multilateral development banks such as the World Bank advocate the market-based Public-Private Partnership (PPP) aimed at attracting private finance and deepening marketized governance, China is forging a state-capitalist alternative through its Belt and Road Initiative. These models are far from mutually exclusive. Through a conjunctural approach, this research examines the broader trade and financial interdependencies in which these models are entangled, and the geopolitical and geoeconomic objectives enframing the emergent infrastructure regime. Developing nations caught in the crosscurrents of these approaches and interests face uncertain risks and possibilities. In Indonesia I show how these approaches are grounded in ii infrastructure projects, framed by competition between China and Japan. Specifically, in Jakarta, I examine the coming together of these models, visions and practices as they articulate with the political-economies of city and state, and their path-dependent restructuring precipitated by the speculative 1997 Asian Financial Crisis. I show how political interests and developmental objectives of state and city governments are entangled with the speculative capital accumulation strategies of State-Owned Enterprises (SOEs), shaping the speculative state-space of the post-colonial metropolis. With a number of new rail transit projects in the city-region driving a boom in Transit- Oriented Development, SOEs speculate on market conditions and the ‘world-class city’ dreams of middle-class residents to leverage their propertied assets. In the territorially and institutionally fragmented landscape of metropolitan Jakarta this financial speculation is equally premised on political speculation around the planning and execution of the projects, enabled by elite informality and statecraft. These speculative state-spaces are also framed by the developmental politics of affordability and accessibility to the city. I examine how these strategies, practices and tensions come together to produce innovative governance arrangements in the provision and management of transport and housing. iii The dissertation of Dimitar Anguelov is approved. John A Agnew Michael Goldman Ananya Roy Helga M Leitner, Committee Co-Chair Eric Stewart Sheppard, Committee Co-Chair University of California, Los Angeles 2021 iv To my family. v TABLE OF CONTENTS INTRODUCTION………………..……………………………………………..…1-19 CHAPTER 1: Banking ‘development’: The Geopolitical-economy of Infrastructure Financing………………………………..…………………………...……………20-56 CHAPTER 2: The un/bankability of development: financializing infrastructure in Indonesia and its more-than-capitalist outcomes…………….…………………...57-85 CHAPTER 3: Financializing Urban Infrastructure(?): The Urban Growth Machine and Speculative State-Spaces in Jakarta – A Southern Perspective…………….86-122 CONCLUSION………………………..……………..……………………...…123-134 BIBLOGRAPHY……………………..………………..………………………135-161 vi LIST OF FIGURES AND TABLES Figure 1. Relational representation of actors involved in project financing…………49 Figure 2. Modalities and Hybridity in Infrastructure Financing in Indonesia……….51 Table 1. National regulatory state-spaces shaping the LRT and speculative urbanism in Jabodetabek……………………………………………………………………….98 Figure 3. Rail transit and Transit-Oriented Developments in Jabodetabek………...101 vii ACKNOWLEDGEMENTS I would like to acknowledge the following funding sources: 2017 Foreign Language Area Studies Fellowship 2017 International Institute Fieldwork Fellowship, University of California, Los Angeles 2016 Julia Gouw Research Travel Grant, Center for Southeast Asian Studies, University of California, Los Angeles 2015 Foreign Language Area Studies Fellowship 2015 Ronald Helin Research Travel Grant, Department of Geography, University of California, Los Angeles viii VITA EDUCATION: M.A. Geography (2015), University of California, Los Angeles B.A. International Studies (2011), University of Washington, Seattle PUBLICATIONS: Anguelov, D. (2020) "Banking Development: The Geopolitical-economy of Infrastructure Financing". Area Development and Policy. Sparke, M. and D. Anguelov (2020) Contextualizing Coronavirus Geographically. Transactions of the Institute of British Geographers, 45(3):498–508. Herlambang, S., H. Leitner, J.T. Liong, E. Sheppard and D. Anguelov (2019) Jakarta's Great Land Transformation: Hybrid Neoliberalization and Informality. Urban Studies, 56(4): 627-48. Anguelov, D., E. Colven and P. Rao (2019) 'Dreaming and scheming the "world class" city: on Asher Ghertner's Rule by Aesthetics', in H. Leitner, J. Peck and E. Sheppard (eds.), Urban Studies Inside-Out: Theory, Methods, Practice. Sage: Los Angeles. Daniels, J., M. Omstedt and D. Anguelov (2019) 'Rescaling the urban: on Neil Brenner's New State Spaces', in H. Leitner, J. Peck and E. Sheppard (eds.), Urban Studies Inside-Out: Theory, Methods, Practice. Sage: Los Angeles. Anguelov, D., Leitner H. and E. Sheppard (2018) Engineering the Financialization of Urban Entrepreneurialism: The JESSICA Urban Development Initiative in the European Union. International Journal of Urban and Regional Research 42(4): 573-93. ix Sparke, M. and D. Anguelov (2012) H1N1, Globalization, and the Epidemiology of Inequality. Health and Place, 18: 726-736. PRESENTATIONS: 2021 American Association of Geographers (AAG), Virtual (April 7-11): Financializing Urban Infrastructure?: The Urban Growth Machine and Speculative State-Spaces in Jakarta – A Southern Perspective. 2019 American Association of Geographers (AAG), Washington D.C. (April 3-7): Banking Development: The New Geopolitical-Economy of Infrastructure Financing. 2018 Real Estate Round Table "The Economics of New Towns: Why They so Often Fail?", Harvard Graduate School of Design and Tarumanagara University, Jakarta, Indonesia (March 15): Evaluation of 30 Years of New Town Development in Greater Jakarta 2018 American Association of Geographers (AAG), New Orleans, LA (April 10-14): Financializing Infrastructure in Indonesia: Hybrid outcomes of Market-led reforms. 2016 American Association of Geographers (AAG), San Francisco, CA (March 29- April 2): Engineering the Financialization of Urban Entrepreneurialism: the JESSICA initiative in the European Union. 2015 American Association of Geographers (AAG), Chicago, IL (April 21-25): Financializing Urban Governance in the European Union. 2014 American Association of Geographers (AAG), Tampa, FL (April 10-14): Geographical Political Economy of Financialization: Financial Engineering Instruments for Sustainable Urban Development. x INTRODUCTION In 2015, China’s launch of the Asian Infrastructure Investment Bank (AIIB) caught the attention of the West, with the United States in particular seeing it as a challenge to Western-dominated multilateral financial institutions like the World Bank (Wolf, 2015). As the United States’ European allies joined the AIIB, the Obama administration’s swift rebuke indicated the high geopolitical and geoeconomic stakes at play. With endless caricatures of this stand-off filling newspapers’ editorial pages, this moment underscored the (long-anticipated) shifting geopolitical tectonics and center of world power towards Asia (Arrighi, 2007). This shift was punctuated by the North Atlantic Financial Crisis of 2008, which raised questions about the sustainability, credibility and hegemony of Anglo-American neoliberal (and increasingly financialized) capitalism. This shift is also driven by competing ideologies of globalizing capitalism and Development, pitting China’s state-capitalist model (which has helped it become a global superpower) against the neoliberalizing order of the West. In particular, these tensions and competing ideologies are expressed in competition over infrastructure development and financing, shaping not just the emergent geopolitical order but also approaches to and understandings of Development. 1 In the recalibrating post-2008 (and now post-pandemic) global economy, marked by slowing and uncertain growth, infrastructure development and financing have emerged as a key mechanism for achieving geopolitical-economic aims: For 1 I draw on Hart’s (2001) distinction between small-d development, reflecting actually existing development trajectories and patterns, and big-D Development,