Indonesia Maritime Hotspot
The “Indonesian Maritime Hotspot” initiative is one of a series of programs introduced by the Stichting Nederland Maritiem Land, or NML. This program is executed with the objective to present a view on Indonesia’s maritime sector. In particular, it should help maritime stakeholders and key players to answer the challenges and investigate improvement opportunities the Dutch maritime industry can contribute to Indonesia’s development.
Indonesia offers many investment opportunities for foreign investors in numerous maritime sub sectors because of the following:
- Indonesia has favourable geographic characteristics. It possesses an abundance of both renewable and unrenewable resources such as fisheries and offshore oil and gas. Moreover, Indonesia’s strategic geographic location between two oceans and two continents creates high trading potential. As an archipelago consisting of more than 17,000 islands, a well-functioning shipping industry is a basic requirement.
- The Global Maritime Fulcrum program of the new government has motivated the central government to directly implore and invite foreign companies to invest in various Indonesian maritime sub sectors.
- Increased trade likely to be brought by the ASEAN Economic Community will accelerate the need for investment in maritime infrastructure, as well as bring an influx of goods to and from Indonesian ports.
- Nevertheless, there are certain challenges towards investing in Indonesia’s maritime sector. They are:
- Regulations and governance imposed challenges prohibit or limit foreign investments in certain sub sectors.
- Rules and regulations are frequently subject to change.
- Local bureaucracies, with numerous government institutions handling the same issues, are often complicated and tough to navigate, especially for foreign companies with limited experience and/or local connections.
While rich in natural resources and investment potential as well as focused in its maritime ambitions, Indonesia can be a challenging market due to its malleable regulations that at times can be unclear and prone to changes. Connections and good relations with local players, related government institutions, and other stakeholders are likely to bring advantages and ease both the set up and daily operation of foreign businesses. Internally, Dutch maritime organisations have to bundle their forces and create a collective effort in establishing and promoting their ventures in Indonesia.