JAKARTA – Indonesia’s finance minister raised – then quickly downplayed – the idea of imposing a levy on ships using the straits of Malacca and Singapore, stressing that Jakarta would not exploit strategic waterways for revenue.
Speaking at a financial symposium in Jakarta on April 22, Finance Minister Purbaya Yudhi Sadewa acknowledged that while Indonesia sits at the strait, a critical global trade and energy route, turning that into a source of income is neither straightforward nor necessarily appropriate.
“If only it could be like that, but that’s not the case,” he said in his speech, pointing to the legal, geopolitical and practical constraints involved.
His remarks came after he briefly floated the idea that Indonesia could take a cue from Iran’s move to impose charges in the Strait of Hormuz. Iran recently signalled plans to charge vessels transiting the strait amid escalating tensions and security concerns linked to the conflict in the Middle East.
“We are on a strategic global trade and energy route, but we do not charge ships passing through the Strait of Malacca,” said Dr Purbaya. “Now Iran is looking to charge ships passing through the Strait of Hormuz.”
He added that any move to do the same in the Strait of Malacca would have to involve Malaysia and Singapore, the other littoral states along the Malacca Strait.
“If we split it three ways between Indonesia, Malaysia and Singapore, that could be quite something, right?” said the minister with a laugh.
Dr Purbaya, however, quickly walked back the idea, stressing that Indonesia would not seek to monetise international shipping routes simply because it can do so.
The roughly 900km-long Strait of Malacca links Asia with the Middle East and Europe, carrying about a quarter of global trade. It runs between Indonesia’s Sumatra and the Malay Peninsula before narrowing into the Singapore Strait between Singapore and Indonesia, and is governed by longstanding principles of openness and freedom of navigation under international law.
The cooperative approach between the three countries in managing the waterway was underscored in a statement by the Maritime and Port Authority of Singapore (MPA) on April 17, following the 34th Meeting of the Aids to Navigation Fund Committee held in Singapore.
“As one of the world’s busiest shipping lanes, safety in the straits of Malacca and Singapore depends on both reliable infrastructure and sustained international cooperation,” MPA said.
It added that Indonesia, Malaysia and Singapore had “reaffirmed their commitment to keeping the straits of Malacca and Singapore open and safe, in accordance with international law”.
Separately, Singapore’s Foreign Minister Vivian Balakrishnan said on April 22 that the littoral states shared a strategic interest in keeping the straits of Malacca and Singapore open, noting that all three are trade-dependent economies and work together to maintain free passage through the waterways.
“The right of transit passage is guaranteed for everyone,” Dr Balakrishnan said at a CNBC event in Singapore. “We will not participate in any attempts to close or interdict or to impose tolls in our neighbourhood.”
Earlier in the month, he had made a similar point in Parliament, saying Singapore would not enter into negotiations over safe passage through key waterways such as the Strait of Hormuz, as doing so would undermine international law.
“There is a right of transit passage, it’s not a privilege to be granted by the bordering state,” said Dr Balakrishnan on April 7. “It’s not a licence to be subjugated at all. It is not a toll to be paid. It is a right of all nations’ ships to traverse.”
The recent comments from Dr Purbaya, Dr Balakrishnan and the MPA came days after a United States warship, the USS Miguel Keith, passed through the Strait of Malacca on April 14.
The Indonesian authorities said the passage was routine and in line with international law, noting that ships, including military vessels, have the right of transit passage through the waterway.
Foreign Minister Sugiono, speaking to reporters on April 22 in response to questions about a recent defence pact and proposed overflight arrangements with the US, said such developments would not draw Indonesia into wider geopolitical tensions.
He stressed that any defence cooperation would go through Indonesia’s own processes, with sovereignty and national interests taking priority.
Mr Sugiono added that foreign naval activity in the region was not new. “I think this is normal, they patrol in the region. There is such a thing as freedom of navigation patrols,” he said.
The minister reiterated that Indonesia’s longstanding “free and active” foreign policy allows it to engage multiple partners without taking sides. “With the global situation as it is, Indonesia will inevitably be affected by whatever happens in the world,” he said.
