Maritime connectivity within ASEAN Dimas Muhamad  ;  The writer works at the Indonesian Foreign Ministry

JAKARTA POST, 12 November 2014

                                                

                                                                                                                       

In English there is a term used to embody the place where we have a profound historical and cultural bond, namely homeland. It is rather fascinating when we compare it to Indonesian because the term that has the closest meaning to it is tanah air, which literally means land and water. As if our ancestors wanted to emphasize that the land is not the only place where we belong, our vast seas are also our home. In this light, it is only natural that President Joko “Jokowi” Widodo has envisaged the notion of a maritime axis for Indonesia. As the world’s largest archipelago we simply cannot afford to turn away from our seas. In the upcoming ASEAN Summit in Myanmar, President Jokowi is expected to further highlight his vision of the maritime axis along with maritime connectivity. Without solid connectivity and infrastructure, the theme of this year’s summit, which is to move forward to a prosperous community, will barely materialize. A robust connectivity will enhance productivity, augment trade, reduce logistical costs and bolster economic development. In other words, connectivity is the path toward prosperity. Research cited by the World Bank concludes that a doubling of spending on infrastructure capital raises a nation’s GDP by roughly 10 percent. Maritime connectivity is even more vital considering that maritime transportation is responsible for 80 percent of global trade volume. Notwithstanding its evident benefits, our own maritime connectivity remains abysmal. In Indonesia only 4 percent of freight is delivered by sea. Based on the World Bank’s latest Liner Shipping Connectivity index, which measures how connected a country is to the global shipping network, we rank 48th behind Singapore, Malaysia, Vietnam and Thailand. The cost of shipping a container from Padang to Jakarta is three times higher than the cost of dispatching that container from Jakarta to Singapore. The government has not been twiddling its thumbs. In 2014 the central government allocated over Rp 200 trillion (US$16.6 billion) for infrastructure, double the amount in 2010. The government understands that since the cost of infrastructure development is going through the roof, investment is urgently needed. It is estimated that from 2015 to 2020 we need $630 billion for infrastructure, of which the government can only provide $190 billion. Regrettably, private sector involvement in our infrastructure projects remains meager. Confronted with such a herculean task of upgrading our infrastructure, Indonesia cannot paddle its own canoe This is where ASEAN steps in. Over the past few years, regional connectivity has been at the top of its agenda. In 2010 ASEAN hammered out its own Master Plan on ASEAN Connectivity (MPAC) which is a groundbreaking guideline to orchestrate a concerted effort to promote regional linkage. Maritime connectivity is an integral element of the MPAC as mirrored in one of its strategies namely to accomplish integrated, efficient and competitive maritime transportation whose key actions include improving the capacity of 47 designated ports and establishing efficient shipping routes. ASEAN has also kick-started the ASEAN Infrastructure Fund (AIF) aimed at assisting the financing of infrastructure projects in ASEAN. As excellent as the master plan is, we need to expedite its implementation. For instance, a part of the plan to invigorate the Malacca-Dumai (in Riau) shipping route is only planned to start more than four years after the plan’s adoption. The plan already has a scorecard mechanism to assess its implementation. However, it needs to incorporate more measurable indicators. For instance on the strategy of achieving an integrated maritime transportation system, the impact indicator could be the increase in seaborne trade flow. The AIF is projected to grant loans of $300 million per year but the infrastructure needs in the region stand at $60 billion per year. It needs to expand its capital base, this can be done for instance by working together with the fledgling Asian Infrastructure Investment Bank initiated by China. When all is said and done, ultimately overhauling our maritime connectivity depends on our own commitment and endeavors. Moreover enhancing ASEAN connectivity while our national connectivity remained lagging would only be counterproductive, especially when the ASEAN Economic Community is just around the corner. To this end it is imperative for the government to strengthen our public private partnership (PPP) program to support infrastructure development, by overcoming regulatory bottlenecks, formulating competitive profit-sharing frameworks and improving the bankability of our infrastructure projects. However to boost our own connectivity we can and should make the most of what ASEAN has to offer including through conforming to the standards set in the MPAC, exchanges of best practice and obtaining funding from the AIF. Currently our seas are more of a wall rather than a bridge. In order to transform this we have no other choice but to revitalize our maritime connectivity which necessitates our government not only working alone but also in collaboration with the private sector and the international community including ASEAN. Only when all hands are on deck can we change our seas from being the barrier that keeps us apart into a unifier that binds our tanah air together, that is when we can unleash our full potential and when the true maritime axis will emerge. ●