Informing fisheries reform and investment in Indonesia

About

Indonesia is the second largest fishing nation in the world and sustainable fisheries are crucial to supporting Indonesia’s economic growth and the food security, nutritional needs, and livelihoods of millions of Indonesians. However, ensuring the continuous provision of seafood to support both local and commercial needs has proven to be a challenge due to the persistence of quasi open-access, and resulting overfishing, of many fisheries. While recovering Indonesia’s overfished fisheries can provide huge economic and social benefits in the long-term, there are tradeoffs and costs associated with this process. Strategic investments are needed to kick-start fishery recovery, reduce the potential short-term societal cost of fishery recovery, and sustain management. 

Designing a coordinated strategy of improved management and value-enhancing investments requires the quantitative assessment of fishery outcomes under alternative investment and management policy scenarios. We assessed the impacts of different types of management reforms, their level of enforcement, and value-enhancing investments on select Indonesian fisheries in target Fisheries Management Areas.

Approach

In consultation with our partners from the World Bank, Walton Family Foundation, and Indonesia’s Ministry of Marine Affairs and Fisheries, we selected key species and classes of management interventions to set the foundation for our study. The three selected species groups – skipjack tuna, the snapper/grouper complex, and scads – represent important “demonstration” fisheries that include different commercial and food security characteristics, cover international, mixed, and domestic markets, and are targeted by both commercial and small-scale fishers. We considered four management classes: business-as-usual, fishing permits, total allowable catch, and individual transferable quotas. We represented various value-enhancing investments (e.g., improved cold storage, new fish processing facilities) as a single investment that raises the price of fish. 

Using bioeconomic models tailored to each of these key species, we were able to assess the effect of various management interventions, enforcement levels, and value-enhancing investments on biomass, catch, profit, and compliance. We also examined the socio-economic and distributional impacts of investment and management interventions on small-scale and commercial fisheries (i.e. changes in catch and economic returns to these sectors).

Key Findings

Our model results gave rise to several policy-relevant findings:

• Fisheries management reforms can lead to increased economic returns and biomass in the long-run. The magnitude of benefits from fisheries reform depends on the type of intervention implemented.
• The presence of a large, weakly regulated small-scale fishery sector erodes many of the benefits from commercial fishery management. Therefore, management of the small-scale sector is required to fully capture the benefits of commercial sector reform.
• Value-enhancing investments improve short-run economic returns but require strong management to sustain their benefits in the long-run.
• Current fisheries status has a large influence on the impact of management reform and investment in the short-run. Fisheries that are currently experiencing overfishing generally receive larger relative benefits from reform than from investment. Fisheries currently experiencing light overfishing (or underfishing) receive larger relative benefits from investment than from reform.
• The incentive to illegally fish grows as the economic benefits from fishery reform and investments accrue. As an intervention generates higher economic returns, stricter enforcement will be required.

Partners

This project is a collaboration between emLab, Dr. John Lynham at the University of Hawaii, Dr. Umi Muawanah and Duto Nugroho from Kementerian Kelautan dan Perikanan (The Indonesian Ministry of Marine Affairs and Fisheries), the World Bank, and the Walton Family Foundation.