Jokowi seeks ban on buying of foreign ships

A shipyard in Tanjung Uncang, west of Batam Island. Batam has seen its shipbuilding industry expand in the last decade, peaking in 2011.
A shipyard in Tanjung Uncang, west of Batam Island. Batam has seen its shipbuilding industry expand in the last decade, peaking in 2011. ST FILE PHOTO

Indonesian leader hopes this will revive his country's maritime and shipbuilding industry

IN A site visit to Batam over the weekend, President Joko Widodo called for a ban on the import of ships after discovering that the island hosts most of the shipyards in the country, and learning about Indonesia's shipbuilding capability.

The move is certain to raise concerns over the country's nationalistic tendencies.

"I am surprised that Indonesia has 250 shipyards, of which 105 of them are in Batam - this is a big industry," he told reporters during the visit, flanked by an entourage of ministers including Coordinating Economics Minister Sofyan Djalil, Defence Minister Ryamizard Riyacudu and Industry Minister Saleh Husin.

All state-owned firms, government agencies and ministries will be urged to refrain from purchasing cargo ships from overseas. Mr Joko also ordered a stock-take of the country's supply.

"I say this again, no more buying from overseas. Why do we need to do so if we can make it ourselves? Our trade balance can (become too big) if the current practice continues," he said, to applause from staff of shipbuilding companies.

Some view his latest ban as nationalistic, adding to other policies such as requiring foreigners to pass a compulsory Bahasa Indonesia language test, which was later withdrawn after protests.

In the last six months, the government has also imposed a slew of other regulations perceived as nationalist, such as requiring smartphone suppliers to use 40 per cent  locally made components before they can distribute phones here.

Trade Minister Rachmat Gobel also banned imports of second-hand clothing  to protect the local garment industry.

Still, others say the ban on buying foreign-built ships is in line with Mr Joko's idea of restoring Indonesia's maritime sovereignty and reviving a flagging maritime sector that has been hit hard by the current economic slowdown.

Indonesia's economy grew 4.7 per cent in the first quarter, the slowest rate in six years, and has prompted economists to revise growth forecasts to below 5 per cent - in contrast to the 5.7 per cent that Mr Joko has pegged the Budget to this year in order for his reform plans to take shape.  

Batam, with deep-harbour facilities, has seen its shipbuilding industry expand in the last decade, peaking in 2011.

Its growth has since declined with the onset of a global economic slowdown that affected orders. 

To stimulate the shipbuilding industry, the government has rolled out several incentives such as tax breaks on components. 

A senior commissioner of Anggrek Hitam Shipyard, Mr Moekhlas Siddiq, told The Straits Times that local shipbuilders like him welcomed the moves in the hope that it could boost growth. 

Coordinating Minister for Maritime Affairs Indroyono Susilo said no other regulations are needed, just implementation.

 "In each tender for procurement of ships, we will make sure domestic builders are preferred," he said yesterday in Batam.

In the past week, Mr Joko has made checks on ports and the maritime industry a priority, expressing his disappointment over long waits and inefficiency at the country's busiest seaport of Tanjung Priok in Jakarta.

Yesterday, he also met Fisheries and Maritime Affairs Minister Susi Pudjiastuti, who told reporters that she had revoked up to 15 fishing licences belonging to six big groups after they were found to be involved in illegal fishing and  selling extra stock to foreigners.

A version of this article appeared in the print edition of The Straits Times on June 23, 2015, with the headline 'Jokowi seeks ban on buying of foreign ships'. Print Edition | Subscribe