Indonesia to Bolster Security, Investment for South China Sea Islands

Opposing China’s economic, military might . . . 

Earlier this year, Indonesian President Joko Widodo signed a presidential regulation expanding defence capabilities and catalyzing economic development for the Natuna Islands archipelago, located in the southern part of the South China Sea. The policy, announced publicly three weeks ago, includes plans to develop maritime defence and security zones around the islands and promote industrial clusters to stimulate the islands’ economy. The move is intended to counter China’s increasing assertiveness around the islands, particularly related to fishing rights and oil and gas exploration. Indonesia claims the waters around the islands are part of its exclusive economic zone (EEZ), while China views a portion of Indonesia’s EEZ as falling within its nine-dash line maritime claim.

Simmering disagreements . . .

In addition to increasing Chinese fishing activity in the area, it was reported last year that China demanded Indonesia halt oil and gas exploration in the maritime zone with overlapping claims. Indonesia refused to comply and for several months military ships from both countries patrolled the oil and gas field. Similar situations have led to the Indonesian government’s decision to bolster its defence capabilities around the Natuna Islands in recent years. Many analysts see President Widodo’s recent announcement as an extension of these efforts, with the addition of significant strategic investments in local fishing, oil and gas, and tourism sectors.

To compete or co-operate?

In bolstering its military capabilities in the islands, Indonesia is enhancing its relationship with the United States, a strategic move that analysts assert will aggravate China. Later this year, the Indonesian National Armed Forces and the United States Army will hold the largest iteration of their annual joint ‘Garuda Shield’ military exercise. This year’s exercise will involve 14 countries and include drills in the areas surrounding the Natuna Islands. However, some analysts also see the potential for strategic economic co-operation with China by partnering to explore and exploit the oil and gas reserves around the islands. The area boasts one of the world’s largest unexplored gas opportunities with proven reserves of 46 trillion cubic feet. But given the military attention both sides have invested, Indonesia-China co-operation on this oil and gas field seems unlikely.