Financing Indonesia’s Marine Protected Areas: from designation to effective governance
Successful marine governance in Indonesia is an increasingly important objective as coastal and marine tourism expand. On World Oceans Day Alia Yusuf, Wallis Greenslade, Mohamad Dian Revindo and Muhammad Fadhil Firjatullah reflect on progress – and the gaps that remain.
Home to one of the world’s richest marine biodiversity hotspots, Indonesia’s oceans are a carbon sink, an area of thriving marine biodiversity and an important source of economic livelihoods. Alongside fisheries, marine biodiversity underpins an important contribution to one of Indonesia’s fastest growing industries: tourism. In 2024, the direct contribution of tourism-related industries to the national economy reached nearly 5%, continuing an upward trend over the past three years.
The role of MPAs in supporting marine ecosystems and local economies
A healthy marine ecosystem supports local business turnover through tourism-driven accommodation, transport, food services, guiding, dive operations, marine recreation and linked fisheries activity. In tourism hotspots like Bali, the economic contribution is clear – the share of food service and accommodation activities in regional GDP amounted to 22.3% in 2025. This economic activity feeds into locally generated revenue in the form of local taxes, retributions and non-tax state revenues.
But the relationship between ocean ecosystems and people’s livelihoods carries an inherent tension. The same economic activities that rely on a healthy marine ecosystem can also contribute to nature degradation through overuse, extraction and pollution, undermining their economic value and sustainability. Without effective marine governance, these economic activities may be unsustainable and its fiscal contribution unrealised.
For Indonesia, the establishment of Marine Protected Areas (MPAs) is the primary policy tool for managing this tension and the Government has announced its commitment to expand its MPAs to cover 1% of its oceans by 2030 and 30% by 2045. This second target is embedded in Indonesia’s National Biodiversity Strategy and Action plan, under the Kunming-Montreal Global Biodiversity Framework’s ‘30 by 30’ goal. To this end, the government has already designated 31 million hectares of its 32.5 million hectares by 2030 target (see map), making it among the most ambitious national MPA expansion policy goals globally.
However, expanding MPA coverage and allocating financial resources to implement effective management of these areas remain distinct challenges. Continued expansion of MPAs is important to meet international commitments. But designating an MPA without committing resources to effective management through monitoring and enforcement does not deliver sufficient marine protection. It also misses the opportunity to capture the economic benefits of MPAs. Research suggests that investment in marine protection can generate benefits worth up to three times the cost of MPA implementation, through both the direct and indirect effects of healthier oceans on surrounding economies.
Indonesia’s Marine Protected Areas currently cover 31 million hectares (Source: Ministry of Marine Affairs and Fisheries, 2026)
The ecological and economic case for increasing MPA financing
MPAs have been lauded as instruments that can protect coral reefs, fish habitats and wildlife encounter sites from local overexploitation and pressures, enabling the conservation and recovery of marine ecosystems. In turn, these ecological gains can sustain long-term livelihoods for local communities through healthier fish stocks, improved amenity values and more sustainable tourism activity, while also contributing to local public revenue.
The expansion of MPAs is one policy objective; their effective management is another. Management of MPAs must go beyond a one-off act of designation. It must ensure a recurring governance function that is sustained across dispersed marine areas and multiple economic uses.
Under Indonesian law, MPAs are classified into no-take zones, sustainable fisheries zones, utilisation zones and other categories. Each imposes different restrictions and offers different levels of protection. As a result, MPAs are intended to protect biodiversity while also managing the interface between fisheries and tourism, both of which demand continuous monitoring, enforcement and site-level coordination.
The challenge lies in financing effective implementation. Recent evidence identifies that the main constraint on effectiveness is operational capacity rather than a lack of ambition: funding gaps for infrastructure, facilities and human resources remain significant, while staffing shortfalls are widespread across priority MPAs. A study of 36 priority MPAs found that 70% did not meet the minimum staffing requirement of eight personnel, reflecting limited monitoring capacity. The lack of infrastructure, including boats, also limits staff’s ability to cover areas under their responsibility. These operational shortfalls weaken protection and place both ecological and economic benefits at risk.
Long-term financing is essential because it underpins the future economic benefits of marine protection. Some economists have therefore likened such protection to an investment in the underlying natural asset itself: a healthy ocean. In practical terms, sustained investment in local marine management increases staffing capacity, improves infrastructure and can strengthen community-based conservation efforts, from ecological monitoring to patrols against illegal fishing. At present, the limited funding originates from a mix of international donors, central and subnational government budgets, and site-linked revenue streams such as visitor entry fees.
Alongside financing, planning and capacity-building are crucial for effective marine governance
The Indonesian government’s framework to evaluate MPA management effectiveness (SIDAKO) reflects the resource shortage. One component assesses foundational management capacity where indicators include financing, human resources and infrastructure. By 2022, on average MPAs scored below 50% across these three categories. The shortfall was even more pronounced for MPAs managed by provincial governments, which oversee around 64% of total MPA territory, compared with those managed centrally by the MMAF.
This points to a wider policy lesson: increased financing will not be enough if it is not matched by careful planning, institutional capacity and clearer prioritisation. Under constrained fiscal space, resources need to be directed where pressures are greatest and the economic costs of ecological decline are likely to be highest. Monitoring and enforcement should be prioritised in tourism-intensive MPAs, where marine degradation can quickly translate into losses in visitor demand, local livelihoods and public revenue.
Indonesia can also draw on successful domestic practice. The Weh Island MPA, for example, has been cited as a case in which stronger bottom-up governance and community participation have contributed to better ecological and social outcomes, including stronger trust among local fisher-people and tourism operators, higher coral cover and increased biomass of reef fish compared with neighbouring MPAs.
In many respects, Indonesia’s ambition to expand MPAs is world-leading. But the implementation and governance across its MPA network remains highly uneven, undermining the ecological and economic benefits of expanding protected areas.
Ultimately, degradation of the marine environment weakens local economic livelihoods and undermines the credibility of marine-based economic development strategies at both the domestic and international levels. Recognising the economic co-benefits of effective marine management strengthens the case for greater public investment in monitoring, enforcement and long-term institutional capacity.
Effective public investment requires reframing the policy challenge itself. The goal should not be simply to expand MPA coverage at all costs, but to ensure that protected areas are sufficiently well-managed to preserve marine biodiversity and ecosystem services as long-term natural assets for Indonesia that deliver co-benefits across socioecological and socioeconomic landscapes.
A forthcoming policy brief co-authored by the Institute for Economic and Social Research (LPEM) in Indonesia and CETEx will explore the implications of the implementation gap in Indonesia’s MPAs in greater detail.