NAVIGATING BETWEEN TWO REEFS: LIBERAL EXPANSION AND IMPLEMENTATION OF THE CABOTAGE PRINCIPLE IN INDONESIA, 1816-2010

This article focuses on the development of the implementation of the cabotage principle in domestic shipping in Indonesia. This field of research is interesting because the implementation of the cabotage principle in the Indonesian maritime sector has been very slow during the post-independence Indonesia. Such a phenomenon is somewhat bizarre considering that, since 1957, Indonesia has claimed to be an archipelagic country in which all the sea waters located between the islands that belong to it are in the territory of the Republic of Indonesia. The Dutch colonial government implemented the cabotage principle as a protective system in the early 19th century. Although the cabotage principle has been applied post-independence for more than half a century, concurrent with the Djoeanda Declaration in 1957, in practice, the implementation of the cabotage policy was half-hearted. This article shows that this phenomenon was strictly related to the re-expansion of Western capitalism after the recognition of sovereignty by the Dutch at the end of 1949. In addition, fierce competition among the ruling political factions also paved the way for the power of capitalism to influence the government to give birth to domestic shipping liberalization policies. For this reason, the article discusses the implementation of the cabotage principle during the Dutch colonial government. This article also examines the factors behind the slow pace of implementation of the cabotage principle in Indonesia, which is closely linked to the competition between the expansion of the market mechanism regime and state policy in the domestic shipping business in Indonesia.