Following the recent proposal to levy charges for the Strait of Malacca, Indonesia has now repeatedly assured that it is not pursuing any such plans.
Previously, Iran and the Strait of Hormuz had been used as a model. But as soon as the proposal was made, Indonesia’s Finance Minister Purbaya Yudhi Sadewa withdrew it. Last week, he had floated the idea at an infrastructure symposium: Indonesia, Malaysia and Singapore could jointly levy a toll fee for the use of the Strait of Malacca and split the profits between them – the potential for this was “significant”, said Purbaya.
While the idea was not directly rejected in Malaysia, Singapore immediately positioned itself on the side of international shipping. There would be no fee. “The right of transit is guaranteed for everyone,” said Foreign Minister Vivian Balakrishnan.
Sadewa withdrew the proposal at the end of the week. He reiterated that Indonesia would not charge any fees and would adhere to the United Nations Convention on the Law of the Sea.
The Strait of Malacca is one of the most important shipping routes in the world. Between 30 and 40% of international trade passes through the approx. 900 km long strait, with more than 100,000 ships passing through last year. It is the shortest route from East Asia to the Middle East and Europe that is navigable all year round. Although the Northeast Passage is the shorter route to Europe, it is frozen over for large parts of the year – although Russia recently planned to make the route through the Arctic permanently navigable.
Indonesia’s move follows the current situation in the Strait of Hormuz, which is blocked by both Iran and the USA. As a result, shipping in the Persian Gulf has effectively come to a standstill and the lack of oil exports has caused prices to rise dramatically worldwide. Negotiations between the two warring parties are currently on hold, with US President Donald Trump recently calling for an extension after the first ceasefire expired, initially without a time limit.
