Asia’s main archipelagos eye bigger share of maritime trade

Asia’s main archipelagos eye bigger share of maritime trade

JAKARTA — The world’s seaborne trade exceeded 10 billion tons in a single year for the first time in 2015, according to the United Nations Conference on Trade and Development, with about 60% passing through Asia.

 Sitting between the Indian and Pacific Oceans, Southeast Asia’s big archipelagos should be well placed to capitalize as trade expands. Indonesia and the Philippines comprise about 17,000 and 7,500 islands respectively, while Indonesia, home to the world’s fourth-biggest population — about 260 million people — has the second-longest coastline after Canada.

However, the bulk of this seaborne trade is moving between Europe and Asia’s powerhouse economies in China and Japan, mainly through the South China Sea and the Strait of Malacca, which lies between Malaysia and the Indonesian island of Sumatra.

“The largest archipelagic countries in the world are not being optimized,” said Fauziah Zen, an economist with the Economic Research Institute for ASEAN and East Asia, at the recent launch of a report on Southeast Asia’s maritime infrastructure published by The Habibie Center, a Jakarta-based research organization.

Southeast Asia’s total trade rose by nearly 50% between 2004 and 2014, but the combined container port throughput of Indonesia and the Philippines was around a third less than throughput in Malaysia, and less than half the level in Singapore, according to the report.

In Southeast Asia, only Singapore — listed by the World Economic Forum as having the world’s second-best port infrastructure — and to a lesser extent Malaysia’s Port Klang, attract enough business to place them among the world’s top-ranked ports.

Singapore is the world’s second-busiest port according to the World Shipping Council, with Malaysia’s Port Klang ranking 12th. Six of the world’s 10 busiest ports are in China, (seven, if self-governing Hong Kong is included), while South Korea’s Busan is listed sixth. The highest-ranked Indonesian port was Tanjung Priok in Jakarta at 27th, with Manila the top Philippine port at 35th place.

Containers at a port terminal in Yangon, the commercial capital of Myanmar (Photo by Simon Roughneen)

Initiatives such as China’s ambitious “Belt and Road” scheme to build or fund infrastructure upgrades in countries as far afield as those in Eastern Europe could prompt improvements to ports around Southeast Asia, but observers see most of the region as unable for now to make the most of the region’s sea trade potential.  Zamroni Salim, co-author of The Habibie Center report, said that ports in countries like Cambodia, Myanmar, even Indonesia, “all lag behind, compared to Singapore.”

The 2016 World Bank Logistics Performance Index, based on a worldwide survey of 1,200 global freight forwarders and express carriers, ranks Singapore 5th out of 160 countries. Elsewhere in the Asia-Pacific region, Hong Kong came in 9th place, with Japan 12th, Australia 19th, South Korea 24th and China at 27th place.

Apart from Singapore, other Southeast Asian countries fared relatively poorly, with Malaysia 32nd and Thailand, Southeast Asia’s second biggest economy, ranked 46th. The region’s two major archipelagic countries were well down the rankings, with Indonesia 63rd and the Philippines 71st.