Opportunities and Challenges in Indonesia’s Fishery Sector

CEIC Indonesia Data Talk - November 20, 2014 As the largest archipelago country in the world, with 13,487 islands, Indonesia has huge potential and abundant wealth in its territorial waters. The country’s geography is conducive to the development of its fisheries; Indonesia is surrounded by seawater and there are around 5,500 rivers and lakes to be found throughout the country. Figures from the Central Bureau of Statistics reveal that the fishery sector contributed 3.32% or IDR86.88 trillion to gross domestic product in the third quarter of 2014. This figure is 15.29% higher compared to its contribution in the third quarter of last year, which totalled IDR75.36 trillion. The export volume of fish, crustaceans and other marine resources increased by 22.2% to 73.87 million kg in August 2014, from 60.45 million kg in the same period of last year while the corresponding exports value rose by 41.0% year-on-year. Modest increases in fishery export prices over the years have driven the fishery export sector despite volatility in export volume; fishery exports account for 2.1% of overall exports as of 2013. Despite the stronger performance in the sector, Indonesia lacks the wherewithal to fully maximize its economic potential. Poor transport facilities and infrastructure, particularly on the outer islands of Indonesia such as Maluku, North Maluku, and Papua, are still obstacles for developing marine resources. Many of these islands remain unconnected to each other and the mainland. Indonesia’s port infrastructure has suffered from neglect, largely due to financial constraints over the years. Many of the ports are in bad shape and impede the country’s internal and external maritime commerce, causing revenue losses, procedural delays, and high shipping costs. In fact, the shipping cost for a container from Sumatera to Jakarta is more than three times as much as the same container costs from Jakarta to Singapore. As a consequence, Indonesia’s maritime trade and commerce has failed to realise its full potential. On the other hand, the lack of human resources and weak regulation on maritime affairs and fisheries still hamper the exploration of marine resources in Indonesia. Many issues concerning over-fishing, illegal fishing by foreign boats, and damage to the marine ecosystem lack effective resolution. Part of the issue lies in the sector’s inability to attract investments. As a primary sector, fisheries see little investment inflows, both from domestic and foreign sources. While domestic investment realization stands at IDR41.6 billion and while foreign investment realization stands at USD7.5 billion during the third quarter of 2014, domestic investment in fishery is negligible while foreign investment in fishery stands at just USD1.68 million. Besides the sector’s productive aspects and its contribution to Indonesia’s export earnings, the fishery sector is also crucial as a means of feeding the domestic populace. Indonesia is a major seafood consumer given its abundance and the fact that the country is also the fourth most populous worldwide. Statistics from the Ministry of Marine Affairs and Fisheries show fish consumption growing to 38.0 kilograms (kg)/capita in 2014 from 35.2 kg/capita in 2013. Figures from the Central Bureau of Statistics also show the average monthly expenditure per capita for fish rising to IDR28,356 in 2013 – its highest level since 2000 and an increase of 6.6% from 2012. However, rising monthly expenditure may be largely attributed to the rising price of fish (both fresh and preserved) rather than rising consumption. The CPI components for fresh fish and preserved fish rose by 11.2% and 12.3% year-on-year respectively during December 2013. A more efficient fishery industry may help partially alleviate high food price inflation (double-digit throughout the greater part of 2013) and by extension, overall inflation (hovering above 8% during the end of 2013). Despite being a primary sector, improvement in Indonesia’s fishery sector is aligned with the government’s overall economic goals. Investments in enhancing inter-island connectivity and upgrading port infrastructures goes a long way towards improving Indonesia’s fishery sector while coinciding with the government’s overarching policy in improving trade and commerce through improved infrastructures. By Yudha Prawira Google+ Author Profile - CEIC Analyst Discuss this post and many other topics in our LinkedIn Group (you must be a LinkedIn member to participate). Request a Free Trial Subscription. Back to Blog
20th November 2014 Opportunities and Challenges in Indonesia’s Fishery Sector

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