Sector
Fishery
Indonesia, boasting the title of the world’s largest archipelagic country with a vast sea area of 5.8 million square kilometers, stands as one of the largest producers and suppliers in the global fisheries market. The abundance of sea area provides Indonesia with a wealth of fisheries products, making fisheries a national leading sector in the country.
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Fishery
Indonesia, boasting the title of the world’s largest archipelagic country with a vast sea area of 5.8 million square kilometers, stands as one of the largest producers and suppliers in the global fisheries market. The abundance of sea area provides Indonesia with a wealth of fisheries products, making fisheries a national leading sector in the country.
There are 23 regions where fisheries stand out as a leading sector, supporting local economies and providing food security. These regions encompass Aceh, Bengkulu, Riau, Lampung, South Sumatra, Central Java, Bali, West Nusa Tenggara, East Nusa Tenggara, Central Kalimantan, South Kalimantan and North Kalimantan. Other regions include Central Sulawesi, Southeast Sulawesi, South Sulawesi, West Sulawesi, North Sulawesi, Gorontalo, Maluku, North Maluku, Papua, West Papua, and Bangka Belitung.
In 2022, Indonesia’s fisheries sector contributed a total of Rp505 trillion to the country’s gross domestic product (GDP). Building this strong foundation, the country set an ambitious target of reaching US$7.2 billion in fishery exports by the end of 2023. Previously, total fishery product exports had hovered around US$5 billion to US$6 billion.
Supporting the sector’s contribution to the country’s GDP is its production. Throughout the third quarter of 2023, Indonesia’s fisheries production totaled 24.74 million tons. This figure includes both capture fisheries and aquaculture. In aquaculture, the main commodities are seaweed cultivation and shrimp cultivation, while in capture fisheries, the main commodities are tuna, skipjack tuna, and mackerel tuna.
Furthermore, Indonesia’s fisheries sector is experiencing a surge in investment. By the third quarter of 2023, the sector had attracted a total of Rp9.56 trillion in investment, with significant contributions from a mix of domestic sources at Rp5.32 trillion, foreign investors at Rp1.4 trillion, and credit sources at Rp2.84 trillion. Notably, China is the largest foreign investor, contributing Rp370.74 billion, followed by Malaysia with Rp240.4 billion, and Switzerland with Rp152.89 billion, highlighting the increasing international interest in Indonesia’s fisheries potential.
While Indonesia boasts impressive fisheries production and growing investments in its fisheries sector, it is vital to uphold fisheries regulations. These regulations ensure that this valuable sector thrives alongside healthy marine ecosystems. It is reported that Indonesia is scheduled to enforce a new fisheries policy in 2025, which will see quotas assigned to industrial, local, and non-commercial fishers across six designated fishing zones, covering all 11 fisheries management areas (FMAs) in Indonesia. The new quota system responds to a worrying rise in overexploited FMAs, which have increased to 53 percent from 44 percent in 2017.
Latest News
The establishment of the Indonesia International Financial Center (IFC), introduced through the revised Financial Sector Development and Strengthening (P2SK) Law, has raised concerns that it could become a channel for illicit funds. The concern stems from the law's simultaneous introduction of legal protections for buyers of special government bonds, shielding them from criminal, civil and tax investigations while prohibiting the bonds from being used for tax assessments or as evidence in court proceedings.
The IFC represents an ambitious effort to position Indonesia as an international financial hub. However, the legal protections afforded to buyers of Danantara's special bonds, including the Patriot Bonds and Red and White Bonds, risk undermining the credibility the IFC needs to attract sophisticated institutional investors, including family offices. Moreover, the government's three-month deadline to complete the IFC Law may leave insufficient time to develop the robust institutional framework such a financial center requires.
Article 248A of the P2SK Law defines the IFC as a zone primarily dedicated to financial sector activities with financial and administrative autonomy, as well as a special legal jurisdiction based on "international principles and/or standards".
The zone will be governed by an IFC Council, and more than one IFC may be established. Businesses operating within the IFC will be subject to special taxation procedures and enjoy tax incentives and other facilities. The article also mandates that the IFC Law be enacted within three months of the P2SK Law coming into force on June 17, 2026.
As for the incentives, Coordinating Economy Minister Airlangga Hartarto signaled that the IFC could become a tax haven, noting that international financial centers such as Dubai and Singapore provide tax incentives of up to zero percent to remain globally competitive. He argued that Indonesia also needs to offer an attractive fiscal regime if it wants to compete for international capital.
Policymakers see the possibility of Indonesia becoming a tax-friendly jurisdiction, similar to Singapore, Hong Kong, and the United Arab Emirates, as an acceptable trade-off for attracting significantly higher investment. For comparison, Indonesia attracts an average of Rp 2.2 quadrillion in investment annually, compared with around Rp 5 quadrillion in Singapore. Meanwhile, Dubai attracted around US$800 billion in foreign direct investment and capital inflows associated with its financial center ecosystem.
However, Finance Minister Purbaya Yudhi Sadewa rejected suggestions that the IFC would turn Indonesia into a tax haven. He explained that the IFC would be established as a new special economic zone in Bali covering around 100 hectares, with tax incentives applying only to funds held within the zone, while investments made outside the IFC would remain subject to Indonesia's normal tax regime. Purbaya also said the IFC could adopt a common law system separate from Indonesia's civil law framework, potentially giving effect to the "special legal jurisdiction according to international principles and/or standards" stipulated in the P2SK Law.
The Dubai International Financial Centre (DIFC), one of the main benchmarks for Indonesia's IFC, is one of the UAE's Financial Free Zones (FFZ). It is exempt from the UAE's federal civil and commercial laws but remains subject to federal criminal laws, including anti-money laundering legislation. Analysts argue that the DIFC's institutional autonomy is one of the key features Indonesia's IFC should emulate. However, they caution that Indonesia must first develop strong financial infrastructure, data security, and regulatory oversight to establish credible safeguards against money laundering and terrorism financing
