U.S., Japan May Invest in Indonesia Islands Near South China Sea

(Bloomberg) -- The U.S., Japan and South Korea are keen to invest in Indonesia’s Natuna Islands as President Joko Widodo steps up efforts to rebuff Chinese claims over the resource-rich waters in the South China Sea.

The countries are interested in building fisheries processing and manufacturing industries in Natuna, Coordinating Minister for Maritime Affairs and Investment Luhut Pandjaitan, told reporters in Jakarta on Friday. Indonesia can manage the sea dispute with China without going into a war, Pandjaitan, a former general, said.

U.S., Japan May Invest in Indonesia Islands Near South China Sea

“The U.S. investors have expressed their interest, along with investors from Japan, Korea and China,” Padjaitan said. “For us, it doesn’t matter where they come from.”

Widodo’s efforts to lure foreign investment into the Natuna islands may ratchet up tension with Beijing following the intrusion of Chinese fishing vessels into an area claimed by Indonesia as an exclusive economic zone. Indonesia is not a claimant in the broader dispute over the South China Sea, but it does insist on its sovereign rights to waters around the Natunas.

Beijing says while it has no territorial disputes with Jakarta, claims over maritime interests in certain waters in the South China Sea “overlap.”

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“War is the last resort in our negotiation process,” Pandjaitan said referring to the standoff with China on Natuna. “But under no circumstances will we negotiate our sovereignty and territorial rights.”

Jokowi, as Widodo is commonly known, visited the Natuna islands last week and asserted Indonesia’s sovereignty over the waters after authorities deployed fighter jets and warships to push back the Chinese fishing vessels, which were accompanied by coast guard ships. The president also inaugurated a fisheries processing center in the region and days later invited Japan to invest in Natuna to develop the fishing industry.

Indonesia is also seeking investment by Vietnamese marine processing companies. Foreign Minister Retno Marsudi met officials of Hai Nam Co., a seafood importer this week in Ho Chi Minh City, and asked it to explore a joint venture with Indonesian companies for a fisheries processing unit in areas including Natuna, according to a foreign ministry statement Thursday.

It has identified a location in north Natuna for a fishing port, while southern Natuna will serve as a base for the navy, Pandjaitan said. The country will also soon acquire its first ocean-going vessel, probably from Denmark, to beef up its sea powers, he said.

©2020 Bloomberg L.P.

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