INDONESIAN PORT DEVELOPMENT IN SOUTHEAST ASIAN REGION AND GLOBAL CONTEXT

The port sector is one of the important economic sectors in Indonesia. As the largest archipelagic nation in the world, the maritime activities mainly the port and shipping sectors are very critical importance to the national economy. Since Indonesia gained independent, less attention has been given by the government in developing the port sector despite more than 90 per cent of the country import and exports activities are through sea. While other countries in the region and other part of the world are trying to develop their ports in terms of upgrading infrastructure by adapting new technology, and becoming more competitive in both national and international market, ports in Indonesia still remain backward in terms of infrastructure, suffering from decades of poor governance and under-investment. Therefore the aim of the article is to discuss the background of the development of Indonesian ports and to identify the challenges faced by the government in providing the state-of-the-art facilities and infrastructure. Finally this article will discuss the future plans that will be undertaken by the government to enhance the port productivity through the establishment of the 2008 Shipping Law in order to promote competition and private sector participation in Indonesia.