Indonesia's Foreign Minister Sugiono has categorically rejected imposing tariffs on vessels transiting the Malacca Strait, stepping back from a proposal that threatened to upend 40 percent of global trade flows and sparked immediate diplomatic pushback from Singapore and Malaysia.
"Indonesia tidak akan memberlakukan tarif di Selat Malaka," Sugiono stated on April 23, according to Kompas, using the Indonesian phrase for "Indonesia will not impose tariffs on the Malacca Strait." The clarification came after Finance Minister Purbaya Sadewa floated the possibility of charging ships passing through the waterway, a suggestion that revealed Jakarta's fiscal pressures under President Prabowo Subianto.
Singapore's Foreign Minister Vivian Balakrishnan responded on April 22 with a firm assertion of transit rights guaranteed under the United Nations Convention on the Law of the Sea. "Transit rights are guaranteed for all nations," Balakrishnan said. "We won't participate in efforts to close, block, or impose duties in our waters."
Sugiono acknowledged Indonesia's obligations under UNCLOS Articles 37-39, which designate the Malacca Strait as an international shipping lane. He noted that archipelagic nations like Indonesia receive recognition of their territorial claims only if they refrain from levying charges in their straits.
The episode highlights the tension between Jakarta's economic ambitions and ASEAN's tradition of consensus-based cooperation. Malaysia, the third littoral state along the strait, has similarly opposed any taxation scheme. The waterway connects the Indian Ocean to the South China Sea, carrying one-fifth of global oil shipments and serving as the primary route for Asian manufacturing exports.
For Singapore, which depends entirely on maritime trade and hosts the world's second-largest container port, any Malacca toll would represent an existential threat. For Indonesia, the swift retreat from the proposal underscores the limits of unilateral action within a region where ten countries, 700 million people, one region remain more connected through trade than divided by borders.
