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Maersk willing to invest billions in Indonesia if cabotage laws change

Ahead of a state visit by the Danish queen to Indonesia this week, which will see Denmark’s largest shipping line in tow, Jakarta has been weighing up $3bn of carrots offered by Maersk.

The Danish line has made plain it wants to invest billions in the sprawling archipelago but will not until the country changes its cabotage law.

Maersk has said it is willing to spend $3bn over the next five years, Indonesia’s State-Owned Enterprise Minister Rini Soemarno said over the weekend.

“[Maersk] expressed interest to transports goods within our territory, in order to reduce logistics costs,” Rini said as quoted by Investor Daily over the weekend. “But they stumbled upon our shipping law that requires majority shareholders to be locals. They wanted to be the majority.”

Indonesia’s cabotage law has been the source of much debate ever since it was promulgated seven years ago. Jakarta is looking at reviewing the law at the moment.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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