Indonesia looks for untapped potential in blue economy

Blue economy broadly refers to activities involving maritime and coastal territories and marine resources, such as fishing and aquaculture.

Ruth Dea Juwita

Ruth Dea Juwita

The Jakarta Post


May 19, 2023

JAKARTA – Indonesia’s vast maritime territory should play a greater role in spurring the country’s economy, says a government agency tasked with drawing up long-term plans for national development.

In a press conference at the National Development Planning Conference in Jakarta on Tuesday, the National Development Planning Agency (Bappenas) highlighted the so-called blue economy as a new area of focus in the government’s “effort to transform the economy.”

This could “revitalize the [ASEAN] region”, said Bappenas undersecretary for economic affairs Amalia Adininggar Widyasanti, “so that, when we set up the market in the region, we are not only generating high, but also inclusive and sustainable economic growth.”

She added that Indonesia would release its blue economy road map in July.

The term blue economy broadly refers to activities involving maritime and coastal territories and marine resources, such as fishing and aquaculture, coastal tourism, seabed mining, generating renewable energy like wave power and tidal power as well as freight shipping and passenger transportation.

Bappenas’ announcement is connected to the launch of the ASEAN Blue Economy Framework at the 42nd ASEAN Summit held last week in Labuan Bajo, East Nusa Tenggara.

“Under Indonesia’s ASEAN Chairmanship, Bappenas has established an initiative to develop the blue economy into a new source of economic growth in the ASEAN region,” said Amalia.

The ASEAN Blue Economy Framework is one of the priority economic deliverables from the leaders’ summit and will be developed by Bappenas with support from the Economic Research Institute for ASEAN and East Asia (ERIA), which is headquartered in Jakarta.

The framework is aimed at defining goals and priorities for the advancement of the region’s blue economy to utilize untapped economic potential of water resources.

It follows up on the ASEAN Leaders’ Declaration on the blue economy adopted at the 38th ASEAN Summit in 2021.

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In a separate development, Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan has highlighted the potential of Indonesia’s seaweed and fisheries industry.

The seaweed industry offered huge potential, to the extent that it could become a substitute for oil and plastic raw materials, the minister said in a press release published on Tuesday.

During a meeting with South Korean Deputy Minister of Trade, Industry and Energy (MoTIE) Jang Young Jin on May 9, Luhut invited Korea to work together in developing the seaweed and fisheries industry and resorts for the elderly.

“As a country rich in maritime resources, we sincerely hope Korea can provide a market for fishery products from Indonesia,” Luhut said, pitching Indonesia’s outlying Natuna Islands in the Riau Archipelago for the project.

“I previously talked to Korea’s deputy minister of MoTIE. We talked concretely, I proposed [that Korea invest in] Natuna. Let’s build a seaweed industry, then fisheries,” he said, as quoted by news agency Antara.

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Amalia noted the potential for economic development through the blue economy “to help people break out of the middle-income trap”.

Besides the blue economy, Bappenas is also banking on further industrialization, particularly in the processing of natural resources, to achieve its 2024 target for GDP growth in the range of 5.3 to 5.7 percent.

“We are pushing the downstream industry to generate more jobs and provide better quality of life for people,” said Amalia.

Achmad Baidowi, a marine engineering lecturer at 10 November Institute of Technology (ITS), points to what he sees as Indonesia’s massive potential in blue energy to support fishing and other activities of coastal communities.

He notes in particular that solar, wave and wind energy could be harnessed to meet local electricity needs. When combined, these clean power sources could help overcome energy shortages in several regions without compromising Indonesia’s climate policy.

“If there is no energy, the economy will suffer,” Achmad told The Jakarta Post on Wednesday.

However, “overlapping policies” on off-grid energy raised questions about the government’s goal to achieve net-zero emissions by 2060, he said.

“[What] is the policy on connecting self-sustained electricity? Is PLN [state electricity company] OK with it?”

Fishery socioeconomics lecturer Suhana at Muhammadiyah University of Technology (UTM) Jakarta has also expressed concern over existing regulations, saying that some could be holding back development of the fishing industry.

One such rule is Government Regulation No. 11/2023 on measured fishing, which he says does not favor domestic fisheries.

Suhana added that declining growth in the fisheries sector was partly due to policies over the last five years that failed to encourage stability.

“In the first quarter of 2023, fisheries economic growth was only 0.03 percent [year-on-year], and when compared to the fourth quarter of 2022, fisheries economic growth contracted by 13.25 percent,” the told the Post on Wednesday.

Both Achmad and Suhana concur that the government needs to tackle regulatory overlap, align policy implementation with the day-to-day realities of coastal communities and resolve limitations in technology and transportation.

Editor’s note: This story was corrected to show that Suhana is a lecturer at Muhammadiyah University of Technology (UTM).

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