The Expulsion of KPM and its Impact on the Inter-island Shipping and Trade in Indonesia, 1957–1964

Abstract

Some historians think that the expulsion of the KPM (Koninklijke Paketvaart Maatschappij/Royal Packet Company) from Indonesian waters in 1957 had a disastrous impact on the inter-island shipping and trade in this largest insular region in the world. It is assumed that the Indonesian people did not have the capacity to overcome such serious problems generated by the absence of KPM from their waters, as financial inadequacy in buying new ships to replace the KPM fleet, the non-existence of experience and managerial skill in operating a modern, big shipping company and the like. Considering how big the role of KPM in the Indonesian inter-island shipping was, it is also imagined that the expulsion of this company would be a precondition of economic stagnation in Indonesia, because there was no shipping which had adequate experience to take over the role of KPM. As Dick states ‘Suspension of KPM sailing in December 1957 was the end of an efficient inter-island shipping (in Indonesia)’.