Determining the Economic Impact of Indonesian “ALKI”

Indonesia represents a unique country, not only in its diversity manifested within its flora-fauna and its culture, But also in its geographical structure. Indonesia represents the world’s largest archipelagic country nesting between two large oceans; The Indian ocean in the west and the south and The Pacific Ocean in the northeast. Moreover, Indonesia is positioned between two continents, namely Asia and Australia. In line with the facts above, it is not unusual that both the Indonesia’s governance over the sea and air regions are constantly used to supplement crossings of ships between the two oceans and also flights between the two continents

To assure sovereignty, Indonesia has implemented the Hak Lintas Alur Laut or as more commonly known as the Alur Laut Kepulauan Indonesia (ALKI). ALKI stresses the rules that those ships of various kinds and planes must abide by when they transverse through regions of sea and air, also all regions that are governed within ALKI. ALKI is split into 3 different sections. ALKI I consists of the South China Sea, Karimata Strait, Java Sea and Sunda Strait, ALKI II: Makassar Strait, Flores Sea and Lombok Strait , and ALKI III governs the Maluku Sea, Seram Sea, Banda Seam and continues through the Savu Sea in East Nusa Tenggara.

ALKI represents a body of rules which must be praised by the Indonesian Nation because ALKI has been ratified and upheld by the United Nation Convention on the Law of the Sea (UNCLOS). Indonesia represents the first country in the world to have a sea channel that has been recognised internationally, enshrined through its ratification. With all this, all nations know that the body of water which they traverse through from the Pacific towards the Indies, or from Asia to Australia is not international territory but rather part of Indonesian Sovereignty.

However, the economical effects from ALKI has not been enjoyed by Indonesia despite its recognition and its ratification. It can be bluntly put that no economic effects have been reaped by Indonesia at all. Indonesia has not set a fee specific such as an overflight fee or a fee for crossing unlike Russia or the United States. Moreover, only 2% from all ships that cross these regions harbour their anchors on Indonesia ports. Not only that, Indonesia has to display responsibility over foreign ships and planes that cross areas that are governed by ALKI. Situations like these are detrimental towards Indonesia as the legal owner of the air and sea channels governed by ALKI.

Issues and problems like these needs to be remedied by a concrete solution, as a reminder that Indonesia represents a great source of natural resources that needs to be utilized to great extent for the assurance of the prosperity of its citizens according to the mandate of the Undang-Undang Dasar 1945. If not, Indonesia will remain as a nation which only cheers for the flow of international goods through its region.

From an initial observance of this Issue, there are two ways that Indonesia can employ to reap the economical benefits from the existence of ALKI. On one hand is the method of Forcing on the other is attraction or attracting. The former method forces ships and airplanes which crosses the areas of ALKI to pay a certain sum of money. This certain sum of money, can be gained through a license which gives safe passage through Indonesian territory via ALKI. Another would be a payment for security specifically for areas of great danger such as the South China Sea and The Sulawesi known for its Pirates, these are just a few examples of payments that Indonesia can employ. In the case where foreign ships and planes do not forfeit payments in return for these benefits then they are not given a license to pass through the areas governed by Indonesia via ALKI.

The Forcing method proves to be legal and could easily be enforced by Indonesia. However, Indonesia needs to strengthen its position in international politics because definitely this method or policy will receive a plethora of criticisms from powerful nations such as China, India and Australia because it will add additional costs to the initial costs of International trade which has unforeseen effects towards its diplomatic relations and also Indonesia’s political image within the realm of International politics.

The second method that can be employed by Indonesia is Attracting, with aims to attract foreign ships and airplanes which crosses the ALKI regions to dock or transit in Indonesias region. Within this issue, Indonesia needs to provide something attractive in order to attract the foreign ships and planes to dock and transit in Indonesia’s region governed by ALKI.

However there is a certain hindrance that needs to be resolved before Indonesia attracts foreign ships. All regions that are governed by ALKI are not regions of great Industry for Indonesia. Only the Sunda Straits remain as the only channel from ALKI which represents a region of industry for Indonesia. With this in mind, how should the government act in order to fill the empty regions of production and industry within the ALKI regions to incite an activity of Bongkar Muat in these regions. First, there should be a growth in infrastructure in the form of a hub port or Pelabuhan hub and a new industry within the ALKI regions in Balikpapan or Makasar with the intention of exporting goods produced within this ALKI channel Internationally with ease and speed. In addition, goods from the Javanese island that are deemed for international export can be linked with the new harbors through a program called Tol Laut or Sea Highway. With this, Indonesia does not need to transit its goods in Malaysia or Singapore before international export. Cutting the middleman, and storing its goods at the ALKI ports before international export. This certainly can also improve welfare distribution outside of Java.

Secondly, the government needs to have the potential to grow infrastructure in the form of Harbours across the ALKI regions which are substantially large and meets International standards. Like what was mentioned before, the Indonesian Government needs to be capable to provide a suitable amount of cranes to supplement the size of its ports to insure a short dwelling time. Moreover, supplies of food and fuel for the ships need to be available on a constant basis. With this, Indonesian ships will not only pass through Indonesians regions via ALKI but also dock to expend on requirements for the ships and its crew to embark on another voyage.

However, this second option cannot be applied within the aviation industry. The worlds aerospace technology which appears more and more qualified with the addition of the high Load Factor from the flight route which spans from the south to the north of Earth that transverses through Indonesia leads to the unattractiveness for this option. A transit within the regions governed by ALKI will just reduce the efficiency and increase expenditure and also flight time.

In conclusion, From the explanations above, we can conclude that Alur Laut Kepulauan Indonesia (ALKI) represents a great asset to Indonesia that needs to be organised with great expertise and diligence to produce public welfare for the population. Because of this additional effort is required in managing ALKI as a resource for Indonesia. Most importantly is the production of new ports within the ALKI channel, in effect resulting in an even welfare distribution and also efficiency in logistics.

Written by: Tommy Patrio Sorongan

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