Birth of Indonesia’s Maritime Ambition
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.
(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.
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
[7]Ibid, [7]
Mervyn Piesse, “The Indonesian Maritime
Doctrine: Realising the Potential of the Ocean,” page. 5
[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
[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.
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