Indonesia explores legal strategies to boost revenue from Malacca Strait

Recent discussions among Indonesian officials regarding the potential imposition of a toll in the Malacca Strait have sparked international debate.

While Finance Minister Purbaya and Vice Admiral Irvansyah of the coast guard initially suggested the idea to better leverage Indonesia's strategic location, the proposal was later clarified as non-serious following significant pushback,   News.Az reports, citing amti.csis.

Under the United Nations Convention on the Law of the Sea (UNCLOS), specifically Article 44, Indonesia is legally obligated not to hamper or suspend transit passage in international straits, making any direct fee for passage illegal under international law.

Despite the legal restrictions on tolls, the dialogue reflects a growing desire for Indonesia to maximize the economic potential of its waterways. Currently, Indonesia’s maritime revenue from the strait significantly lags behind its neighbors. Singapore’s port revenue reached $8.26 billion in 2025, and Malaysia’s Port Klang and Tanjung Pelapas have become global leaders in throughput and services. In contrast, Indonesia's busiest ports on the strait handle only a fraction of this volume and are often hampered by reputations for inefficiency and unreliable governance.

To bridge this gap, experts suggest that Indonesia should focus on expanding its maritime service industry rather than seeking shortcuts like tolls. Leveraging lower labor costs, Indonesia has a comparative advantage in providing services such as ship repair, bunker supply, and underwater hull cleaning. Furthermore, the nation could capitalize on its position as a leading source of seafarers by offering more competitive crew services, including affordable lodging and regional connectivity in hubs like Medan and Batam. By investing in infrastructure and management reforms, Indonesia can legally increase its share of the Malacca Strait’s growing economic traffic.

News.Az 

By Leyla Şirinova