Indonesian Political, Business & Finance News

Malacca Strait Levy Controversy: Proposed by Finance Minister, Denied by Foreign Minister

| | Source: KOMPAS Translated from Indonesian | Trade
Malacca Strait Levy Controversy: Proposed by Finance Minister, Denied by Foreign Minister
Image: KOMPAS

JAKARTA, KOMPAS.com - The proposal for imposing a tax on shipping routes in the Malacca Strait has begun to emerge in public discourse. The idea was initially raised by Finance Minister Purbaya Yudhi Sadewa, who stated that it draws from the scheme currently being considered by Iran in the Strait of Hormuz. Purbaya assessed that Indonesia's position is highly strategic in global trade and energy routes. He believes this potential has not yet been optimally utilised. According to him, Indonesia needs to coordinate with Malaysia and Singapore because implementing policies in the Malacca Strait cannot be done unilaterally. "If we divide it three ways—Indonesia, Malaysia, Singapore—it would be substantial, right? Ours has the longest and largest stretch," he said. Purbaya assessed that the revenue potential would be considerable if cooperation could be realised. This is because ship traffic in the Malacca Strait is among the densest in the world. "Singapore is small; Malaysia and us could split it two ways. If it could be like that, but it's not," he remarked. Purbaya also stressed the need to change the mindset in managing economic potential so that the approach is no longer defensive. "So, with all our wealth, we must not think defensively; we have to start playing offensively. But still measured," Purbaya concluded.

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