Into the Wild Blue Yonder

Indonesia takes an ocean-wide lead to develop the Indian Ocean’s blue economy

By Ismira Lutfia Tisnadibrata
Thursday, June 15, 2017

Ministers from countries in the Indian Ocean rim agreed during their meeting in Jakarta in May to commit to a number of specific actions to develop the “blue economy” concept as a source of growth.

The agreement, dubbed the Jakarta Declaration, was one of two outcomes from the second Indian Ocean Rim Association (IORA) Blue Economy Ministerial Meeting.

Iora comprises 21 member states: Australia, Bangladesh, Comoros, India, Indonesia, Iran, Kenya, Madagascar, Malaysia, Mauritius, Mozambique, Oman, the Seychelles, Singapore, Somalia, South Africa, Sri Lanka, Tanzania, Thailand, the United Arab Emirates and Yemen.

The blue economy concept emphasizes catalyzing economic activities centered on the ocean as a driver for economic growth by tapping its natural resources and maritime cooperation between littoral states along the Indian Ocean rim.

Arif Havas Oegroseno, the deputy of maritime sovereignty at the Maritime Affairs Coordinating Ministry, who chaired the IORA countries’ senior officials’ meeting, said the declaration will serve as a reference to develop the blue economy by taking into account environmental sustainability, and it encompasses a number of priority sectors such as fisheries, renewable energy, ports and shipping, mining, maritime tourism and maritime research and development.

“It turned out that countries in the Indian Ocean region don’t have port-to-port communication, based on my observation of economic activities,” said Arif. “There is a link through the Port of Rotterdam in the Netherlands because we place a priority on serving Europe as our traditional market, while we overlook Africa, which is quite a big market.

“The Indian Ocean stretches as far as Africa, Asia and Europe and it has big economic potential, yet there is still no organization that can manage it well,” he added.

Vice President Jusuf Kalla acknowledged this potential in his opening speech at the conference, saying that “the seas and the oceans are our future.”

According to Kalla, there are more than three billion people in the world who depend on marine and coastal biodiversity as their source of livelihood and the ocean provides about 13 million tons of fish caught annually, but only represents 13 percent out of the total fish caught in the world, despite more than 40 percent of the world’s fishing population living in the region.

Kalla added that people in the Indian Ocean littoral states also depend on the ocean as their main source of protein and more than 200 million people in the world use the ocean as their workplace, although people’s activities also contributed about 40 percent to marine pollution, overfishing and loss of coastal habitats.

Another significant outcome from the ministerial meeting was that the 21 member countries agreed on voluntary commitments, which outline their pledges to realize the blue economy concept and open possibilities for cooperation with other IORA member states.

“Indonesia proposed these commitments from IORA members states to pledge any assistance they can offer to any fellow member states in any field,” Arif said.

Indonesia, India, Singapore and Australia have pledged their firm commitment to implement the blue economy activities by offering assistance in port management training and capacity building, mitigation on the impact of climate change and coral reef restoration.

For its part, Indonesia has also committed to assist IORA member states in hydrography, tsunami early warning systems and fisheries and agreed to share its experience on providing financial assistance for small-scale fishermen.

“Apparently we are not the only one that has this problem, that small-scale fishermen have difficulties to secure financial assistance because they don’t have assets as collateral,” he said, adding that Indonesia uses the financing scheme of state lender Bank Rakyat Indonesia (BRI) as a model for best practice in providing capital assistance for fishermen.

The scheme involves partnerships with private companies, who secure the loans from BRI and the small-scale fishermen can access the loans through facilitation provided by the companies or cooperation with those companies forged with the fishermen to develop their aquaculture business.

Arif said countries such as South Africa, Oman, Mozambique and Madagascar responded positively to BRI’s presentation on its partnership scheme to assist small-scale fishermen.

Indonesia also offered assistance to restore coral reefs, acknowledging that many Indian Ocean countries are experiencing coral reef degradation.

To ensure financial assistance availability to implement IORA’s blue economy programs, Arif said the member states agreed on the need to involve the private sector since they sustainability is what will make the blue economy concept work.

Kalla also acknowledged this challenge in his opening remarks and he called on governments to respond by supporting business and industry.

The ministerial meeting also touched on the issue of marine plastic debris and all IORA delegations in the meeting agreed that this is a common problem that they need to work together to solve.

“Marine plastic waste is not just Indonesia’s problem but other countries that have maritime territory also have this problem, so they are committed to solve it,” said Coordinating Minister for Maritime Affairs, Luhut Binsar Pandjaitan.

Indonesia is the second-biggest marine polluter in the world after China, and was estimated to dump up to 1.29 million metric tons of plastic waste into the sea annually, according to a study published by the journal Science in 2015. Indonesia has set a target to reduce its marine plastic debris by 70 percent by the end of 2025.

Arif said Indonesia aims for investment to turn the waste into energy and research cooperation to track potential areas to generate the debris inland so they can deal with the waste before it is dumped into the ocean.

“We would like to have investment from IORA member states that have the technology to manage marine waste or from dialogue partners such as Germany, France and the United States that have the technology to turn waste into electricity based on biomass,” Arif said.

Yose Rizal Damuri, Head of the Department of Economics at the Center for Strategic and International Studies (CSIS) think-tank, said the blue economy is a trans-boundary maritime concept and it requires countries to have their maritime policies in sync with one another since a maritime policy issued in one country could have an impact on other countries’ maritime resources.

“Otherwise it would affect one another’s maritime resources’ sustainability,” Rizal said.

According to Rizal, the blue economy was among the topics discussed during Indonesia’s 2013 chairmanship of the Asia-Pacific Economic Cooperation (APEC). Taking this issue more seriously now is in line with the Presidential Regulation on Indonesia’s Maritime Policy issued on March 1, including the 2016-2019 action plan on Indonesia’s maritime policy, which included a point about managing Indonesia’s maritime resources.

“It is not just about reaping economic value from the maritime resources but it is also about making sure it is sustainable, such as maintaining the fish population, maritime connectivity and developing maritime industries,” Rizal said.

Leaders from the 21 IORA member states, who convened in Jakarta in March for the first IORA summit, said they were convinced that the blue economy is a significant driver of inclusive and sustainable economic growth and development in the Indian Ocean region.

In their joint Jakarta Concord, they committed to “harnessing and developing cross cutting issues and priority objectives by developing the opportunity of the oceans by promoting the blue economy as a key source of economic growth, job creation and education, based on the evidence-based sustainable management of marine resources.”

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