Indonesia and India are major Asian powers and share many similarities that have deep rooted maritime connections. There is a strong element of continuity, and in the 21st century several issues point towards political, economic and strategic convergence. For instance, the national maritime vision of Indonesia, called as the Global Maritime Fulcrum (GMF), and India's Sagarmala provide a promising agenda for maritime cooperation.
The GMF is sometimes referred to as Global Maritime Axis, but both terms when translated into Bahasa Indonesia, read as Poros Maritim Dunia (PMD). It was announced under the Presidential Order (Perpres) No. 16/2017 pertaining Indonesia’s Ocean Policy, and has seven pillars. These cover (a) Management and Development of Ocean Resources and Human Capital; (b) Defense, Security, Law Enforcement and Safety at the Sea; (c) Ocean Governance; (d) Economy, Infrastructure and Welfare Improvement; (e)Maritime Domain Management and Marine Environment Protection;(f) Maritime Culture; and, (g) Maritime Diplomacy.
PMD is locally implemented though the initiation of navigational highway or Tol Laut which falls within the remit of (d) above i.e. Economy, Infrastructure and Welfare Improvement pillar. The program is actually a regular shipping service from ports in Java (i.e. Tanjung Priok in Jakarta and Tanjung Perak in Surabaya) to remote areas in the western and eastern Indonesia.
Tol Laut vessels are operated regularly with or without sufficient cargo in their holds, especially on the return voyage. Since 2015, the government through Transportation Ministry covers their bunker fees, port dues, etc., as subsidy which is as high as Rp 200 billion annually. The highest subsidy, more than Rp 400 billion, was disbursed last year. These vessels are operated by the state-owned shipping companies such as PT Pelni, PT Djakarta Lloyd and PT ASDP Indonesia Ferry. Since 2018, some private shipping firms are also involved in the program.
On the shore side, Tol Laut is coupled with the construction of 24 ports across the archipelago. Some are already operational and others will commence service in the next two years. The ports are mostly built and run directly by Transportation Ministry through its special units in charge of port management whose number is more than thousand offices nationwide. To improve the load factor of the returning vessels, the government set up a supply chain called “Rumah Kita” or ‘our house’ managed by Ministry of Trade in collaboration with BULOG (the national logistics company dealing with basic needs procurement), which involves newly set up rural companies of BUMDs and other state companies.
Although the Indian and Indonesian maritime visions converge they 'do not talk to each other', even though both countries enjoy good political and economic relations. For instance, they have abundant volume of cargo, but majority of the shipments are handled by foreign shipping lines instead of national flag carrier. Further, the bilateral maritime trade is transshipped via Singapore or Hong Kong among others. There is also no ‘sister port’ agreement signed by the two countries’ municipalities.
Under the circumstances, Indonesia and India can institute several practical measures to achieve respective maritime visions. First, the two states should set up a Shipping Chamber to promote shipping cooperation as part of the initiative to establish connectivity in the Indian Ocean. As a business-to-business entity, the Chamber could even be a sub-unit of the existing trade and industry chamber of the two countries, or even a separate entity can be explored. A framework for such an initiative can be conceptualized through conferences/workshops involving shipping experts and stakeholders and can potentially expand the scope of shipping cooperation.
Further, direct maritime/shipping connectivity between India and Indonesia can benefit given that the world’s bulk pool now is full of Chinese flagged vessels and shipping companies. Furthermore, the Indonesian government can direct all coal and CPO exports to be transported by Indonesia-flagged vessels by 2020 given that India is the largest buyer of Indonesia’s coal but shipping capacity of both countries is very limited. This business model is completely legal under the United Nations Conventions of Code of Conduct for the Liner Conference 1975.
The other practical measure is that the diplomatic missions of the two countries could set appoint a Transportation Attache as a startup to the shipping chamber to facilitate whatever the shipping players from India and Indonesia may plan. To boost maritime vision, Indonesia may appoint a special envoy or ambassador-at-large to spearhead negotiations with Indian counterparts. This person must be a well known figure in domestic and international maritime circle.
Finally, during the last seventy years of bilateral diplomatic relations, every Track 1 and Track 2 forums held between the two countries have focused on India’s Act East Policy (AEP) which is basically geopolitical and geostrategic in nature. Unlike the AEP, the PMD has several practical dimension for maritime cooperation but has largely been ignored in India. Under the circumstances, it is important to study the PMD and the Sagarmala to facilitate greater vibrancy in bilateral relations.
Mr Siswanto Rusdi is Director National Maritime Institute, Jakarta, Indonesia.