Indonesia's maritime policy
Sep. 15, 2015
Yuko Fukushima joins Aki Shibuya and Sho Beppu for the second time this week to discuss the problems Indonesia is facing.
Beppu: Yuko, you were telling us yesterday about Indonesia's decision to ban the export of raw materials in order to weather the current crisis. And today, you're going to talk about the maritime industry.
Fukushima: That's right, Sho. In the past decade, the major source of growth was urban development, and fishermen were left behind -- although the country is made up of more than 10,000 islands. The government is now trying to reform the fishing industry to make it generate more growth regardless of the global situation.
Shibuya: It seems the Indonesian government is really focused on generating sustainable growth. How does expanding the fishing industry play into that?
Fukushima: To find out, I met the minister who's spearheading the effort. Susi Pudjiastuti is the most popular member of the government. She's quite a character -- she has a tattoo on her leg, and her background is unusual for a minister. She quit high school and made herself an entrepreneur in the fishing and aviation industries. So when it comes to carrying out her policies, she can be dynamic.
A Chinese fishing boat pays the price for trespassing in Indonesian waters -- just one of two-dozen foreign vessels blown up by the Coast Guard in May. They were sunk on the orders of one woman -- Marine and Fisheries Minister Susi Pudjiastuti. She took office last October promising tough action against illegal fishing, and she has kept her word. Last month, she ordered the sinking of another 35 foreign boats.
Susi says illegal fishing is a big problem, and they can't do much else besides sink the boats that are fishing illegally.
Illegal fishing is a problem because offending boat owners don’t report their catches. That means they aren’t paying taxes. The other problem is overfishing. The intruders from China, Thailand and other neighboring countries are exploiting marine stocks already in danger of depletion. Officials estimate illegal fishing is costing Indonesia $30 billion a year.
Susi built a reputation for direct action long before entering politics. She started a fishery while still in her teens. Later, she set up an airline. To her supporters, she’s a straight-talker who acts on her principles.
When asked about the reasoning for the leniency of her ministerial predecessors, Susi said “Probably they do not really know, or they do not really realize what happens in our waters. I mean, if I wouldn't have my aviation experience, I wouldn't have traveled as much as around the country. I wouldn't see that much. Also, if I didn't have experience as an exporter of fisheries, I wouldn't know what is going on from 2003-2013. We had one-million-600 household fishermen decrease to 800,000. So it's a 50% decrease. That means something is not right.”
Blowing up illegal vessels isn't the only hard line measure by Ministry Chief Susi. This is Indonesia's largest port and known for ships hauling in Tuna. But the catches here have gone down by a big margin. This is because the Fisheries Ministry has stopped issuing licenses to foreign vessels and banned the transfer of fish catches on the sea.
A typical tuna boat usually goes out to sea for a month or two, offloading their catch onto big carrier vessels. This allows the boats to stay out longer, hauling in more fish at less cost. But there’s something else going on. Some catches are transferred straight to foreign boats – depriving the government of tax, export duties and other revenue.
Susi has cracked down on this shadow export market. But foreign vessels are not the only ones affected. The ban on trading at sea is also hurting the local fishing industry. That’s because local boats -- legal or not -- now have to return to port every day or two to unload fish. Catches are down, costs are up.
Jakarta Fishing Port's Head, Bustami Mahyuddin, says the ban caused a 30% decline in catch volume between November and May.
Eka Sputra is one of those ensnared by the rule change. He stopped operating 2 of his 10 boats. He says his profits are down by half in the past 2 months. Eka has laid off 60 crew members. He says the workers keep calling from their hometowns, asking when they can go back to work.
Minister Susi is traveling around the country to explain her policies to local fishermen. But there’s frustration in the ports, and it’s growing.
A fisherman says his association has been requesting a meeting with Minister Susi, but nothing has happened so far.
Susi says the big vessels that are involved in illegal fishing have been stopped. Small fishermen are getting more fish. She says that if everything goes well, fisheries could grow at least 10 to 12% this year.
Shibuya: So Yuko, the government is cracking down on illegal fishing. But isn't blowing up fishing boats counter-productive?
Fukushima: Minister Susi acknowledges that too, but she says that's just the first stage. She'll use the next budget to build boats for local fishermen, and in the future, she wants to develop a cold storage infrastructure at the port so fishermen can haul in more fish on their own. Eventually, the government hopes to lift the whole industry to a higher level, where fish cannot just be caught, but also canned, dried-- processed in one way or another.
Beppu: It seems that would work in the longer term, but if you see the imminent situation, cracking down on illegal fishing seems to be hurting local fishermen.
Fukushima: That's right, so Minister Susi also says it's going to be tough to implement the policies all the way through. Her plan is to eradicate a whole segment of the industry that's based on illegal fishing. Many locals either work for, or have some kind of connection with, the foreign companies that operate illegally in Indonesian waters. That makes it very difficult to break the existing network and create a new one. But the minister says in the long run, it should benefit the fishermen and the country.
Beppu: Let's move onto other Asian countries, or to the whole region. We've seen the case of Indonesia, but what can you say about other Asian countries? What are the challenges and how are they trying to overcome them?
Fukushima: After years of rapid growth, emerging Asian countries have advanced to middle income status. But many of them, including Indonesia, are struggling to make the transition to the higher income stage. Until now, they've expanded their economy by relying on low-cost labor to mass-produce and export cheap products. But what they have to do next is to upgrade their industries so they can make higher value-added products, as labor costs increase. Many economists say growth slowdowns are less likely to occur in countries where high-tech products account for a large share of exports. Having said that, all countries in Asia face different challenges as they try to take their economies to a higher level.