National Connectivity a Basis toward a World Maritime Axis Country

May 18, 2016, Indonesia Shipping Gazette

The administration of President Joko Widodo (Jokowi) has an ambition to develop the country into a world maritime axis. But, toward such an ambitious vision, building a national connectivity (sea toll) to cut economy disparity among the islands can be taken as starting point

On April 24, the ruling party of PDIP conducted a national coordinating meeting focusing on maritime issues, in responding the government vision to be a world maritime axis country and how to make the government sea toll program run as expected.

As a ruling party, PDIP absolutely supports the government vision, saying it is the time for Indonesia to be a real maritime country, meaning that any development planning, program, strategies, should be run under maritime-based approaches.

In his remark speech titled “New Paradigm for Indonesia’s Maritime Based Development’, Prof Dr Rokhmin Dahuri, PDIP Head for Maritime Affairs, appreciated the government vision and programs in view of the country’s maritime potentials on one hand, while on the other hand there are still many constraints that should get immediate solution.

 

He presented five reasons why the maritime sector should be taken into account for Indonesia’s development program. First, Indonesia has comparative and competitive advantage in maritime sector; second, the maritime based industry has a strong connection with other economy and industry activities; third, most of maritime sources are renewable resources, giving a long-term comparative and competitive advantage if they are well managed.

Fourth, from the aspects of politics and geopolitics, there will be a guarantee in the politics stability, both in national and international scope. “The political stability can be obtained through keeping the waters secure,” he said.

And fifth¸ from the social culture point of view, the maritime based development is a reinventing aspect of the dominant tradition in the past.

Rokhmin underlined that if the government can maximize the maritime potencies, the other sectors can grow simultaneously. “Furthermore, if it can be optimally developed, the maritime sector can absorb more than 45 million work forces,” he said.

Key Guidelines

 

Coordinating Ministry of Maritime Affairs Rizal Ramli appreciated the PDIP’s initiatives to discuss the issue in a bid to provide inputs to the government, especially to the maritime related departments. Rizal affirmed that though the government has set up some guidelines in setting up the programs to make the vision come true, but he will appreciate any inputs, especially from PDIP as the sponsor party for the government of Jokowi-JK.

He said the government has set up some guidelines while each related ministries had set up some related programs. He underlined five guidelines as the basis to realize the dream to make Indonesia as the world maritime axis.

First, the concept of ‘love the sea’. According to Rizal, there was evidence to say that the countries that make the sea as the leading potency in any aspects of the life, including political aspects, will lead the world. “In the 19th century, with its leading navy, the British conquered the world and led the world in any aspects, politics, economy, and so on. And then, in 21st century, the US also led the world in any aspects of the life, economy, politics, social, culture as this country has number one navy in the world.”

“Our country also had a great experience in the past. The Sriwijaya Kingdom was a great nation that utilized the maritime potency to lead the world. Why? It is because they love the sea and take it for the sake of sovereignty and the people welfare. So if we want to be a leading maritime country in the world, start it with our consciousness of loving the sea,” Rizal said in his presentation in front of more than 1,000 PDIP executives.

Second, any maritime potential should be optimally utilized for the people welfare. Rizal criticized   the current condition in which most of Indonesian maritime wealth are exploited by foreign countries. “Not only fishing sector, but off-shore energy are mostly exploited by foreign plus the in the process of trade and transportation. More than 90% of our export import transportation are handled by foreign companies,” he said.  Third, is build a better national connectivity. “We appreciate our sea toll program which has been running. Hopefully, through this program, we will utilize our domestic waters to connect our islands and to create a cheaper people movement and cargo distribution among our regions,” he said.  Fourth is building a maritime diplomacy through a better negotiation through our Ministry of Foreign Affairs and fifth is building a strong navy. “The last two aspects are crucial to send a message to the world that we are really serious to make the country as the world maritime axis,” said Ramli.

Starting Point

One key objective of Jokowi’s idea of Indonesia as a global maritime axis is enhancing inter-island connectivity and upgrading port infrastructure within the Indonesian archipelago, which encompasses thousands of islands and spans almost 6 million square kilometers. Many of these islands remain unconnected to their neighbors and several benefits from only loose or intermittent contact.

This lack of connectivity is more pronounced in the outer islands of Eastern Indonesia, such as Maluku and North Maluku. As a result, many of these islands have acted as self-sufficient economies, not contributing to or benefitting from national economic production and distribution processes. Similarly, Indonesia’s port infrastructure has suffered from neglect and financial constraints over the years.

Many of the ports are in bad shape and impede the country’s internal and external maritime commerce in the form of revenue losses, time-lag, procedural delays and inadequate port facilities. According to Indonesia Shipping Gazette database, shipping a container from Padang to Jakarta costs more than three times as much shipping the same container from Jakarta to Singapore.

As a consequence, Indonesia’s maritime trade and commerce has failed to utilize its full potential. The nascent doctrine envisages that the revamping of the country’s maritime infrastructure, including the development of better ports and ships, could transform Indonesia into a hub of regional maritime trade and commerce. Inter-island connectivity, it is hoped, would enable effective internal utilization and prevent external poaching of maritime resources. An inter-connected archipelago could leverage Indonesia’s choke points and maritime corridors to enhance trade and commerce.

Minister of Transportation Ignasius Jonan, who also became a speaker of the meeting, underlined that the sea toll program has been running for some instance, underlining that there is evidence to say that the program has helped cut cost disparity among the regions in the country.

“I have just visited a port in Papua that has been covered by sea toll program. Following the scheduled call of Pelni’s vessel, the cost has been cut by 20-30%. Of course we will never be satisfied. We will continue the programs, including port infrastructure development and maintaining the scheduled ship calls,” he said.

Several deep sea ports in Indonesia will be improved to support his sea toll road concept. They include Kuala Tanjung in North Sumatra, Tanjung Priok in Jakarta, Tanjung Perak in Surabaya, and East Java, in addition to Makassar in South Sulawesi, and in Papua.

The government plans to develop 24 seaports to support the project.  Most of the seaports will be located in eastern Indonesian regions, including Southeast Sulawesi.

The high price disparity between eastern and western Indonesian regions so far is caused by expensive shipping freight costs as almost every ship returning from remote areas is empty or carrying no freight.

“If ships delivering goods to eastern Indonesian regions could return with commodities for western regions the freight costs could be cut,” he said, adding that at the end gradually there would be no price disparity any more.

The full operation of the sea toll roads are aimed at easing the disparity of the prices of staples between the western and eastern Indonesian regions by up to 30 percent, Jonan said.

“The drop must be more than (20 percent) so that prices (in eastern regions) would be more reasonable and prices would not go up and down,” he said.

“In the future the number of routes will be increased. With better connectivity price disparity between the western and eastern regions would be smaller,” Jonan said

Early this year, according to Jonan, the government has launched some routes of the sea toll.

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