January 15, 2017 11:50 pm JST

Japan, Indonesia agree to boost maritime ties

But bilateral talks yield minimal progress on big infrastructure deals

WATARU SUZUKI and ERWIDA MAULIA, Nikkei staff writers

JAKARTA -- Japanese Prime Minister Shinzo Abe and Indonesian President Joko Widodo agreed to bolster maritime cooperation, including on security and economic development, during bilateral talks in Bogor, Indonesia, on Sunday.

The two leaders also reaffirmed a joint partnership to develop a sea port in Indonesia's West Java Province, but stopped short of agreeing on details for other key infrastructure deals, including the trans-Java railway.

"As maritime nations, cooperation in the maritime sector is our top-most priority," Abe said during a joint press statement. "Japan will proactively partner [with Indonesia] in maritime security and the development of Indonesia's outermost islands."

Abe said the partnership will be facilitated by an Indonesia-Japan maritime forum established just last month. Meanwhile, a two-plus-two meeting between foreign and defense ministers from the two countries will take place in Indonesia later this year. He added that Japan will provide 74 billion yen ($640 million) in "business opportunities" for the development of irrigation networks and coastal conservation.

"The South China Sea is an international topic of interest directly related to regional stability and peace," Abe said. "The two countries affirmed the rule of law and peaceful resolution of disputes."

Maritime security has been the top agenda for Abe during his four-country trip in Asia, as Japan attempts to halt Beijing's overreaching territorial claims in the South China Sea. Indonesia, his third stop, is not a claimant in the resource-rich sea, but has shown growing concerns over Chinese vessels' illegal fishing activities in its waters.

On the other hand, Widodo is seeking to attract Japanese investment in the maritime sector in a bid to boost economic growth outside Java. He said they held discussions over joint plans to develop "integrated maritime and fisheries hubs in Indonesia's outermost islands."

The president has been working on developing these largely abandoned regions as part of his strategy to bolster Indonesia's border security and defense. Last year, following maritime spats with Beijing over Chinese fishermen's activities near the Natuna Islands, an Indonesian region bordering the South China Sea, Widodo ordered the development of the fisheries industry, tourism, and oil and gas blocks around the remote chain of islands -- apart from increasing the military presence there.

Indonesia's maritime and fisheries minister, Susi Pudjiastuti, said after Abe's meeting with Widodo that Japan and Indonesia have agreed on joint development of three islands -- Sabang, Natuna and Morotai -- all of which are located on the northern edges of the Indonesian archipelago.

"These include investment in the fish-processing industry, the construction of cold storage facilities and the security of the outermost islands," she said.

Meanwhile, discussions over development of large infrastructure projects, a top priority for Widodo, produced lackluster results. Abe said the Patimban port, a deep sea port planned for development 120km east of Jakarta, will be operated by a joint venture company from the two countries. But he stopped short of naming other projects, merely stating that Japan "will cooperate in railway and electricity sectors." 

The two countries have been negotiating a project to revamp a railway connecting the capital Jakarta to the country's second-largest city, Surabaya. Indonesia has offered the project to Japan under a public-private partnership scheme, as opposed to Japan's preference for a government-to-government financing scheme.

The joint press statement also did not touch on the details of a contract extension for the giant Masela LNG project in eastern Indonesia, which is majority owned by Japan's Inpex. Inpex had proposed a plan to develop the project offshore, but Indonesia said last year the project will be developed onshore instead.

Nikkei staff writers Jun Suzuki and Bobby Nugroho in Bogor contributed to this story.

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