How Indonesia Plans to Lead Global Maritime Economics

Luhut Binsar Pandjaitan, the Coordinating Minister for Marine Affairs and Investment, expressed confidence that Indonesia would become the epicenter of the world’s maritime civilization at the observance of the 2022 National Maritime Day.

Pandjaitan added that maritime pursuits did not always involve the sea. The study of the maritime economy led to an understanding that the field comprises activities taking place in maritime areas.

The activities occur in other places that utilize natural resources from water bodies and involve produced goods and services to be used in water bodies.

As a result, maritime economic activities include on-land enterprises that process natural resources from the sea.

The same holds for businesses that create water area exploration, exploitation, and conservation tools. In short, maritime economics can be described as the economics of shipping.

Executing The Maritime Economics Plan

The minister anticipates that Indonesia will advance marine development, as the country once enjoyed great maritime success.

According to Pandjaitan, national development must emphasize maritime development through planning and implementation that considers Indonesia’s status as a sizable archipelagic nation to achieve that goal.

Furthermore, he stated that maintaining the fair and equitable welfare of the populace, rather than enhancing the marine economy, was the ultimate purpose of Indonesia’s maritime development.

Indonesia can use political, cultural, and economic strategies to further its maritime economy. A financial plan was implemented to fully assess and exploit the maritime economy’s potential for the benefit of the general welfare.

The Projection of Indonesia’s Maritime Economics

The government used political tactics to increase maritime resilience, sovereignty, and good governance. The cultural approach also aimed to educate the populace by fostering morality, culture, and human resources advancement in line with the progress of marine science and technology.

According to an interim maritime economic study conducted by the National Research and Innovation Agency and the Coordinating Ministry for Maritime Affairs and Fisheries, Indonesia’s maritime gross domestic product was estimated to be worth IDR 1,212 trillion in 2020.

The number holds 11.31 percent of the country’s overall GDP, which was capped at IDR 10,722 trillion.

According to reports, the COVID-19 epidemic caused this value to fall by about IDR 19 trillion from 2019, when it had reached IDR 1,231 trillion. Nevertheless, despite the loss in value, it contributed more in 2020 (11.3 percent vs. 11.25 percent in 2019).

To encourage the development of the maritime industry, the government will also create the National Long-Term Development Plan for 2025–2045.

Developing Maritime Economics in Indonesia

At present, a third of Indonesia’s valuable coral reefs are in bad condition, over 38 percent of the nation’s marine capture fisheries are overfished, significant coastal ecosystems like mangroves have suffered significant losses, and over USD 450 million is lost annually due to marine debris.

The disadvantages of overcrowding and poor basic infrastructure are apparent in some well-known marine and coastal tourist sites.

According to a report by the World Bank, a sustainable ocean economy will be essential for Indonesia to achieve a sustainable marine environment, a growing economy, and, more importantly, improved coastal livelihood. The report offers various suggestions to aid the government’s strategy and initiatives.

With the help of a national endowment fund and collaborations with the business sector, the government may reinforce the nation’s expanding marine park areas and execute the national fishery management area system for sustainable and fruitful fisheries.

All mangrove ecosystems would benefit from the immediate forest conversion ban being expanded since it would contribute to the government’s ongoing restoration efforts and help stop the eradication of mangroves.

The paper makes additional suggestions for reducing marine plastic litter, such as mandating a minimum amount of recycled content in a few products and extending bans to replaceable items.

It would be beneficial if the government took measures to control the flow of tourists to well-known seaside locations.

Blue Economy Supports Maritime Development

Sustainable use of ocean resources for economic growth, improved livelihoods, and jobs while conserving the health of the ocean environment” is how the World Bank describes the “blue economy.”

The blue economy covers various activities, including trash management, fishing, tourism, maritime transportation, renewable energy, and climate change mitigation. Every sector may boost Indonesia’s development if it is managed sustainably.

The aquaculture program in Indonesia is open to investors. Based on Fisheries Management Areas, the Directorate General of Aquaculture (DJB) has created a marine and fisheries framework (WPP).

The Ministry of Marine Affairs and Fisheries is optimistic that Indonesia’s blue economy investment holds the key to sustained prosperity due to the three-working-day issuing of Online Single Submission (OSS) business permits and clear laws.

The Maritime Affairs and Fisheries Ministry has been given a 2023 budget ceiling of IDR 6.7 trillion for the 2023 Fiscal Year.

The government would primarily use the proposed budget ceiling for fisheries and marine management, followed by programs related to value-added and industrial competitiveness, environmental quality programs, educational programs, and career training.

With solid support from the government, the blue economy is a fantastic opportunity to reap financial rewards and assist Indonesia in using ocean resources sustainably for economic growth, improving livelihoods, and maintaining the health of its ocean ecosystem.

Indonesia Appeals to Foreign Investments

Indonesian Minister of Investment and Head of the Investment Coordinating Board (BKPM), Bahlil Lahadalia, expressed confidence that the country would continue to be a top location for foreign investment in 2023.

Recently, Indonesia has demonstrated a solid economic base. In the second quarter of 2022 (YoY), Indonesia’s economic growth was 5.44 percent, and in June 2022 (YoY). Despite the world’s general unease, Indonesia maintained the inflation rate at 4.35 percent.

As a result of this accomplishment, Indonesia is now considered to have one of the world’s most significant macroeconomic foundations. Our expert consultants in InCorp Indonesia (formerly Cekindo) provide thorough assistance in company registration.

We will also help you obtain the proper business licenses to expedite investments and be a part of Indonesia’s Blue Economy.