Indonesia and Singapore Reaffirm Open Malacca Strait, Dismiss Levy Idea

Indonesia and Singapore have reaffirmed their commitment to keeping the Strait of Malacca open and secure for all vessels, with leaders from both nations stating that the vital waterway will remain accessible to all. The affirmations came during the second Singapore-Indonesia Leaders’ Retreat in Jakarta. Speaking at a joint press conference, Indonesian President Prabowo Subianto emphasized the shared interest between the two neighboring countries in maintaining the Strait of Malacca as a passage free for all parties. "Indonesia and Singapore are countries that directly border one another in the Strait of Malacca. We have a shared interest in maintaining the Strait of Malacca as a passage that is free for all parties," he said, as per the Straits Times. "We must preserve security and peace in the strait, and also, of course, protect it from pollution, accidents, and from robbery or piracy." President Prabowo also stated that Indonesia would continue to coordinate with Malaysia and Thailand to ensure the Strait "always remain open to all, safe, and accessible to anyone who requires access," in accordance with the U.N. Convention on the Law of the Sea (UNCLOS). Singapore’s Prime Minister Lawrence Wong echoed Prabowo’s sentiments, highlighting that recent events in the Middle East, which disrupted shipping through the Strait of Hormuz, underscored the importance of keeping Malacca free and secure. He affirmed that Singapore and Indonesia are "strategically aligned" in upholding navigational rights and freedoms and keeping sea lines of communication open, including the unimpeded rights of transit passage of vessels, in accordance with UNCLOS, which is also customary law. Prabowo’s remarks appear to put to rest any speculation following Indonesian Foreign Minister Purbaya Yudhi Sadewa’s suggestion in April to impose a levy on ships transiting the Strait of Malacca. Citing Iran’s plan to charge a "toll" in the Strait of Hormuz, Sadewa had proposed that a similar toll in Malacca, if implemented cooperatively among the three states bordering the Strait – Indonesia, Malaysia, and Singapore – could generate substantial economic value. "If we split it three ways – Indonesia, Malaysia, and Singapore – it could be quite substantial," he said, noting that Indonesia’s stretch of the Strait was "the largest and the longest." While it was unclear how serious his suggestion was, it immediately prompted expressions of concern from around the region, including from Singapore’s Foreign Minister Vivian Balakrishnan. President Prabowo’s statement appears to snuff out any small chance that Jakarta might attempt to monetize the Strait or push its neighbors to do so – something that will no doubt reassure Singaporean leaders. Beyond security, the leaders also announced several agreements aimed at strengthening bilateral economic relations. They presided over the signing of 26 "tangible and concrete achievements in various fields," comprising 18 government-to-government cooperation agreements and eight business-to-business agreements. A significant development was the signing of a Memorandum of Understanding (MoU) between Indonesia’s new sovereign wealth fund, Danantara, and Singaporean entities Keppel Electric, Sembcorp Industries, and Singapore Energy Interconnections. This MoU focuses on expanding cross-border electricity trade, exploring potential collaboration on the offtake of imported low-carbon electricity, and resolving commercial and technical issues related to cross-border interconnector development. In a joint statement, Danantara and Singapore’s Ministry of Trade and Industry said that the MoU would "explore potential collaboration on offtake of imported low-carbon electricity" and help resolve "commercial and technical issues relating to cross-border interconnector development." Indonesia’s Energy Minister Bahlil Lahadalia indicated that price negotiations for the electricity deal are underway, with expectations of a "breakthrough soon," aiming for a "win-win solution for both" parties.