The Importance of Maintaining a Powerful Indonesian Navy

Indonesian navy corvette KRI Bung Tomo launching an exocet missile

(M Teguh A Nasution) Geography played an important role on shaping a country’s destiny. With the sea dividing the 17 508 islands that makes up Indonesia, it is clear that our nation’s destiny lies on the seas. Past experience had shown that control of the sea is an important factor for maintaining the survival of the rulers of nusantara. The Sumatra based kingdom of Sriwijaya maintained a powerful naval force which allowed the kingdom to control vital trade routes and even mount raids against foreign powers in mainland Asia. For centuries to come, naval power continued to influence the survival of nusantara’s rulers. 

The founding of Indonesia on 17^th of August 1945, and its subsequent 4 year struggle against Dutch attempt of reoccupation was also greatly influenced by control of the Sea. The Dutch although had taken a heavy beating during world war two, still had overwhelming naval superiority against the Indonesians. Ships of the Royal Dutch Navy imposed an economic blockade against Indonesia, resulting in scarcity of commodity.

It was not until the 1960s during the Trikora era that Indonesian naval capability posed a threat against the Royal Dutch Navy. During that time, Indonesian naval capability grew exponentially with the introduction of Eastern bloc weaponries which includes submarines, destroyers, maritime strike bombers and a cruiser. These impressive arrays of weaponry were aimed at neutralizing Dutch naval presence around Papua with the main goal of sinking the aircraft carrier Karel Doorman. Faced with a very real possibility of defeat and under pressure from the United States, the Dutch finally gave up control of Papua. 

Even though Indonesia won control of Papua mainly through diplomatic means, the role of the armed forces cannot be discounted. The powerful state of Indonesia’s navy and air force presented enough deterrence effect against the Dutch that eventually forced them to resort to diplomatic actions.

From that case, we can see that military backing plays an important part in diplomacy. The Prussian King Frederick the Great once said, “Diplomacy without arms is like music without instruments”. So unless a state has the military means to back their demands during a negotiation, an adversary will not take that negotiation seriously. The state of the Indonesian armed forces during Trikora was powerful enough to back Indonesia’s demands during negotiations. The Dutch knew that if they pursued war, they might not just loose Papua, but also ruin their economy which was still recovering from the ravages of world war two.

Nowadays, the state of Indonesia’s armed forces particularly the navy and air force was not as powerful as it had once been during the Trikora era. These were mainly contributed to the switch on defense priority from external defense into territorial defense during the Suharto era. This had been a trend for some ASEAN countries like Indonesia and Philippines during the cold war where overwhelming American naval superiority in the region served as a protection against external aggression. Condition for the air force and navy was further worsened during the 1998 economic crisis which struck a heavy blow against Indonesia’s economy. Defense spending fell sharply resulting in maintenance difficulties and the inability to procure new equipment. Arms embargo implemented by the United States also serves to further aggravate the situation. Fortunately, Indonesia’s economic recovery for the past few years had made it possible again for the navy and air force to procure new equipment. Under the Minimum Essential Force program, the armed forces sought to modernize its equipment to achieve a minimum ideal force capability to safeguard Indonesia’s sovereignty. In particular, the aim for the navy under this program was to establish a green water navy by 2024. 

As an archipelagic state, it is clear that the core of Indonesia’s armed forces strength should be centered on the navy and air force. Currently the Indonesian navy operates 6 frigates and 10 corvettes as their primary major surface combatant, but only 7 corvettes are considered as new and modern. Although the navy operates many other minor surface combatants like missile boats and fast attack crafts, those ships does not present as much deterrence effect as major surface combatants do. 

The importance of naval deterrence for Indonesia these days is still not lost. Growing tensions in the South China Sea is one case where naval deterrence can serve an important role. Even though China and Indonesia officially did not have any territorial disputes, China’s 9 dash line claim in the South China Sea overlaps with Indonesia’s EEZ near the Natuna Islands. Right now, both countries deny having any territorial disputes, but there is no guarantee that it might not happen in the future. 

A strong naval presence can serve to deter China from pursuing its claims of waters near Natuna Island. What happened to the Philippines in the Spratly Islands was a result of the weak capability of their navy. The Philippine navy had no way to contest China’s claims of the Island chain. So when the Chinese began building artificial islands on the disputed reefs, the best thing the Philippines can do is file a diplomatic protest. Unlike the Philippines, Japan was able to contest China’s claim on the Senkaku Islands. With a powerful navy and coast guard, Japan can afford to directly confront Chinese vessels infringing the waters near the islands.

From that case, we can conclude that a powerful Indonesian Navy is essential to safeguard the country’s sovereignty. In the past, we can see that Indonesia’s powerful navy and air force presented enough deterrence effect against the Dutch that eventually forced them to cede control of Papua through diplomatic means. Nowadays, a strong Indonesian navy can serve to deter foreign powers from infringing on the country’s territory whether by illegal fishing, smuggling, or territorial claims. Through the Minimum Essential Program, it is hoped that by 2024 Indonesia will have a green water navy capable of safeguarding the integrity of the state.  

Transforming Indonesia into World Maritime Power and What We Can Learn From South Korea

Birth of Indonesia’s Maritime Ambition

(M Teguh A Nasution) In his inaugural speech as Indonesia’s seventh president, Joko Widodo conveyed an ambitious vision, namely  turning Indonesia into a world maritime power. Transforming Indonesia into a global maritime axis is set to be the defining feature of his five-year administration. This is widely seen as an attempt to reclaim the country’s status as a major maritime power once held by the kingdoms of Nusantara. 

Spanning over 5,120 kilometers from East to West and encompassing 17,508 islands, Indonesia is the largest archipelagic nation in the world. Throughout its history, the people of these islands were known as skilled sailors. Using traditional navigational equipment, they managed to sail as far out as Madagascar. 

With the advent of seaborne commerce, Indonesia’s strategic location has given way to the rise of maritime kingdoms in the past, such as Sriwijaya. This Sumatra-based kingdom’s  expansion into Java and the Malayan peninsula enabled it to control strategic maritime commerce routes like Malacca, Sunda, and Karimata Strait and also the South China Sea.[1]

After the downfall of Sriwijaya, Majapahit, a Java based kingdom, seized the title as one of the leading maritime powers in Asia. Under the guidance of Mahapatih Gadjah Mada, Majapahit was even able to unite the islands of Nusantara and the Malayan peninsula under its banner.[2]

However, the arrival of European colonialist into Indonesia contributed to the decline of indigenous maritime powers there. The Dutch under the flag of VOC controlled and monopolized vital trade routes around Indonesia. Since then, only small maritime kingdoms emerged, living under the domination of VOC. The Dutch’s effective technique of divide and conquer succeeded in keeping the local powers constrained, thus unable to rise and challenge Dutch domination over the seas.

After declaring independence, Indonesia strives to reclaim its past glory as a major maritime power. From 1958, Indonesia struggled to gain recognition as an archipelagic state through the United Nations Convention on th Law of the Sea (UNCLOS). After a long struggle, the concept of an archipelagic state was finally accepted in 1982 at the third UNCLOS conference.[3]

Eventhough with the success of UNCLOS III, Indonesia’s maritime development especially during the three decades of the New Order era was largely neglected. The majority of state budget went through continental based developments like building roads. Maritime sector development took a backseat, making contribution to the national income from this sector far lower than they should have been.

The rise of Joko Widodo to power with his maritime doctrine paves the way for Indonesia to reclaim its past glory as a world maritime power. At the East Asian Summit in November 2014, he outlined his concept of Indonesia as a Global Maritime Axis by focusing on five key areas – maritime culture, marine resources, inter-island connectivity, maritime diplomacy, and naval development.[4]

Creating Indonesia's Maritime Power

The main goal of building Indonesia’s maritime power is to secure economic prosperity and safeguard national sovereignty. As stated by President Widodo at the East Asian Summit in November 2014, there was a need to develop inter-island connectivity, marine resources and naval capability. Indonesia can also look to other Asian countries like South Korea as a benchmark on developing its maritime power.

Enhancing Inter-Island Connectivity

As an archipelagic nation, it is obvious that shipping is a vital part of establishing inter-island connectivity. Unfortunately poor port infrastructure in Indonesia has made shipping goods between islands expensive and extremely inefficient. The cost of transporting goods around Indonesia amounts to 14.08% of the production costs, far higher than those of neighboring countries like Malaysia and Thailand. For example, the cost of shipping a container from Padang to Jakarta is Rp5.4 million, three times the cost of shipping a container from Singapore to Jakarta. This inefficiency has contributed to the low amount of goods transported by sea, made up only 5% of total goods transported in the country.[5]

To solve this problem, President Widodo came up with a mainstay program called “sea highway”. The program aims to decrease the cost of shipping goods in Indonesia by regular shipping from all across Indonesia. This program will require an increase in Indonesia’s merchant fleet and improvement of port infrastructure.

Indonesia’s port infrastructure has been lagging behind its neighbors. Out of the 700 ports that serve Indonesia, only 11 of them are container ports, and Tanjung Priok Port is the largest in the country. It handles 65% of the country’s entire cargo trade. It is extremely congested and works way beyond its capacity.[6] This overburdening of the port has led to inefficiencies in its operation. Dwell time - the time it took for a cargo ship to unload its cargo and depart from the terminal – is still too long. The average dwell time of Tanjung Priok is 6, 4 days, far longer than Singapore which has an average dwell time of only 1.5 days.[7]

To improve connectivity and the shipping of logistics between islands, Indonesia plans to construct and modernize 24 ports over the course of five years.[8] By constructing new ports and modernizing existing ones up to international standards, it can lead to easier access of international shipping into Indonesian harbors. Part of that project is the development of a new facility 7 km along the coast of Tanjung Priok, known as the New Priok or Kalibaru Port. If this $4 billion project is once completed, it will be able to handle 13 million TEUs every year, making it the largest port in Indonesia.[9]

There is also a need to build hub ports in the western and eastern areas of the country.

Ports, like the Port of Sabang in the Western side and the Port of Makassar in the Eastern side of the country, can be modernized into hub ports to compete with the ones in Singapore and Malaysia. These can potentially increase state revenue by diverting foreign vessels which once made transit in Malaysia and Singapore into Indonesia’s hub ports.[10]

Another vital component of President Widodo’s “sea highway” program is the establishment of a large merchant fleet. Currently, 96% of goods exported and 55% of domestic goods distributed still rely on foreign shipping. Domestic shipping companies have been unable to fulfill the national demand due to the unavailability of sufficient number of vessels to do it. To increase the size of Indonesia’s merchant fleet, there are plans to import 500 vessels from China by 2019.[11] This move will cost the country up to US$5.5 billion though some critics argue that it is better if the money is spent for ordering the ships from domestic shipbuilders.

By focusing on the development of port facilities and increasing the size of the merchant fleet, it will certainly improve inter-island connectivity. This will lead to faster economic growth, bringing Indonesia closer to its goal of being a world maritime power.

Protecting and Modernizing Fisheries Industry

With over 5.8 million Km² of sea, Indonesia holds a massive potential for fisheries industry. The economic potential of fisheries sector in Indonesia is estimated to value at $82 billion a year. This massive economic potential, however, has not been fully capitalized. A multitude of problems such as illegal fishing and underdevelopment of the fisheries industry have prevented the full potential of this sector from being uncovered. 

Depleted fish stocks in South East Asia have led foreign fishermen to poach in Indonesian waters. Rampant illegal fishing perpetrated by China, Thailand, Vietnam, Philippines and Malaysia is estimated to cost Indonesia up to US$24 billion annually.

 

The massive amount of loss incurred from this illegal act prompted Indonesia to take tough actions. The Joko Widodo administration implemented a policy to destroy any foreign fishing boat illegally fishing inside Indonesian territory. Fishing vessels from Thailand, Vietnam, Malaysia and Papua New Guinea have all fallen victim to this new policy. 

However, fishing vessels from China have mainly eluded destruction. The Indonesian government government has chosen to take a more lenient approach by cancelling recent privileges of Chinese fishing companies to operate in Indonesia waters.[12]

Besides illegal fishing, underdevelopment of fishery industries has also been a large problem of the fisheries sector. Fishing industries in Indonesia are still hampered by the lack of sufficient cold storage facilities and vessels to transport the catch. In an effort to modernize the industry, there are plans to construct 100 fishery centers equipped with auctioning, storage and processing facilities. Developing aquaculture industries will also reduce extraction of marine resources, thus strengthening maritime food security.[13]

By modernizing the fishing industry and safeguarding it from threats like illegal fishing, Indonesia can harness the full potential of its fisheries sector. This in turn will greatly help the nation’s economy, enabling it to pursue programs like infrastructure development with ease.

Developing Shipbuilding and Improving Naval Capability

The job to safeguard Indonesia’s dream of becoming a global maritime axis from security threats largely falls upon the shoulders of the Indonesian Navy. In the 1960s, the Indonesian navy was regarded as one of the most powerful in the Southern Hemisphere. But after Suharto assumed power, the country switched its focus into territorial defense. During the Cold War, the threat of foreign invasion was largely negated by the strong presence of the United States in the region. Countries like Indonesia and the Philippines focused their defense against internal threats like communist or rebel groups, thus defense spending was largely allocated for the army, not the navy or air force. 

With the end of the Cold War and American withdrawal from the region, South East Asian nations began to improve their military capability. After years of neglecting and underfunding, the Indonesian Armed Forces (TNI) embarked on a modernization effort called Minimum Essential Force (MEF) with the aim to achieve a Minimum Essential Force capable of defending Indonesia’s sovereignty and interest by 2024. Another major target in this effort is to achieve independence in weapons industry by the same year.

To achieve independence in the weapons industry, a Transfer of Technology (ToT) is required for every major arms acquisition from foreign suppliers. Indonesia’s state owned shipbuilder PT. PAL has been engaging in a series of cooperation with foreign shipbuilders in building vessels for the Indonesian navy. Indonesia’s efforts to locally build a guided missile frigate under the PKR program are currently undertaken by PT. PAL and the Dutch based shipbuilding corporation Damen Schelde. 

Another program currently undertaken by PT.PAL is the construction of submarines with the help of South Korean shipbuilder, Daewoo Shipbuilding & Marine Engineering. The program calls for the construction of three submarines. Two of the submarines will be constructed in South Korea with the involvement of PT. PAL while the third one will be built locally. These submarines are an essential part of the navy’s defense strategy and will be used to safeguard Indonesia’s Sea Lines of Communication (SLoC), where it is estimated that 12 subs are needed to effectively defend all of Indonesia’s SLoCs. 

Increasing Indonesian navy’s capability will also need large financial support from the government. President Joko Widodo strives to increase defense spending to 1.5% of the GDP, a significant increase from the current 0.9%. With the planned increase to 1.5% of the GDP, it is projected that by 2019 defense spending will reach US$20 billion, making it the largest in South East Asia.[14]

The effort to reach the MEF by developing domestic arms industry and large financial support from the government will secure Indonesia’s position as a powerful naval force in the region. But it is projected that it will take longer than President Widodo’s 5 year term to materialize. While the achievement of the MEF program will turn the navy into a regional force capable of defending Indonesia’s sovereignty, power projection far from its borders will remain outside of its capability. So it can be concluded that the aim of the MEF program is to transform the Indonesian Navy into a powerful Green Water Navy. 

South Korea: What Lessons Can Indonesia Take?

South Korea is one of the leading economic and maritime powers in Asia. With North Korea blocking its access into continental Asia and the sea covering the rest of its sides, South Korea is essentially like an island nation. Exports which make up 70% of its GDP are mainly transported by sea. Energy resources that are needed to fuel the nation’s vast industry are also located abroad which needs to be imported. South Korea ranks fifth in the imports of crude oil, and second in coal and liquefied natural gas (LNG).[15]

To support its maritime reliant economy, South Korea has embarked on an extensive program to boost the capability of its shipbuilding industry. South Korea began modernizing its shipbuilding industry in the 1970s, motivated by economic and political factors. The government played a huge part in supporting these efforts by offering financial assistance and reducing taxes for the imports of ship parts.

Another part of this bid to modernize the shipbuilding industry is by engaging in technological transfers with foreign shipyards. For instance, Hyundai Heavy Industries, a major Korean shipping company, sought technological assistance from British shipyards to help design dockyards and ships.[16] To improve human resources needed for a sophisticated shipbuilding industry, personnel are trained at foreign shipyards. The knowledge gained from this can then be transferred to the rest of the workforce, thus creating technological mastery for the industry.

Indonesian shipyards have also followed some of South Korea’s steps in developing its shipbuilding industry. Domestic shipbuilding company PT. PAL embarked on a program to build frigates and submarines with the assistance of Dutch and Korean shipbuilders. In that process, engineers from PT.PAL are sent for a training at the foreign shipyards before returning to assist on the construction of the vessels at home. 

South Korea’s success in developing its domestic shipbuilding capability is a great example for a nation like Indonesia that is striving to become a major maritime power. Improving shipbuilding can help Indonesia achieve its inter-island connectivity by increasing the size of the merchant fleet and independence of the weapons industry. Those two factors are an essential part of Indonesia’s strategy to become a global maritime axis.

Conclusion

President Joko Widodo’s vision to transform Indonesia into a world maritime power is ambitious but is not impossible. The development of modern port facilities and increasing the size of the merchant fleet will improve inter-island connectivity, which is vital for the growth of the nation’s economy. The nation’s large economic potential in the fisheries sector can be fully capitalized by modernizing fishing industries across the nation. Tough policies like the sinking illegal fishing boats can help to deter illegal fishing in the future and safeguard the nation’s fisheries sector. Those economic developments should in turn be defended by a capable Indonesian Navy. 

To reach its maritime dreams, Indonesia can also look to the experiences of other Asian countries like South Korea. By following South Korea’s steps on developing its domestic shipbuilding capability, Indonesia can achieve self-sufficiency in its own shipbuilding industry. A sophisticated shipbuilding industry will be an important instrument in maintaining Indonesia’s control over the seas.

---

[1]Bernhard Limbong, Poros Maritim (Jakarta: Margaretha Pustaka, 2014), page. 55

[2]Ibid, page. 59

[3]Ibid, page. 84

[4]Lis Gindarsah and Adhi Primarizki, “Indonesia’s Maritime Doctrine and Security Concerns,” RSiS Policy Report, (2014): page.  2

[5]Mervyn Piesse, “The Indonesian Maritime Doctrine: Realising the Potential of the Ocean,” Future Directions International, (22 January 2015): page. 5

[6]Anonymous, “Prioritising ports: The modernisation of ports is a prerequisite for economic expansion,” Oxford Bussiness Group, http://www.oxfordbusinessgroup.com/analysis/prioritising-ports-modernisation-ports-prerequisite-economic-expansion (accessed on 30 May 2015).

[7]Ibid, [7] Mervyn Piesse, “The Indonesian Maritime Doctrine: Realising the Potential of the Ocean,” page. 5

[8]Michael Mackey, “Indonesia to develop 24 ports in next five years,” IHS Maritime 360, http://www.ihsmaritime360.com/article/15413/indonesia-to-develop-24-ports-in-next-five-years (accessed on 30 May 2015)

[9]Ibid, Anonymous, “Prioritising ports: The modernisation of ports is a prerequisite for economic expansion,”

[10]Ibid, Bernhard Limbong, Poros Maritim, page. 304

[11]Angela Yu, “Indonesia to Import 500 Ships from China,” IHS Maritime 360, http://www.ihsmaritime360.com/article/15789/indonesia-to-import-500-ships-from-china(accessed on 30 May 2015).

[12]Ibid, Lis Gindarsah and Adhi Primarizki, “Indonesia’s Maritime Doctrine and Security Concerns,” page. 5

[13]Ibid, Mervyn Piesse, “The Indonesian Maritime Doctrine: Realising the Potential of the Ocean,” page.  6

[14]David Brunnstrom, “China worries may boost Indonesia defense spending to $20 bln/yr-official,” Reuters,http://www.reuters.com/article/2014/12/09/china-southchinasea-indonesia-id (accessed on 30 May 2015).

[15]Anonymous, “International Energy Data and Analysis,” eia, http://www.eia.gov/beta/international (accessed on 31 May 2015).

[16]Lars C. Bruno and Stig Tenold, “The basis for South Korea’s Ascent in the Shipbuilding Industry, 1970-1990,” page. 17