Indonesia and Malaysia have reached a mutual agreement to pursue a joint development approach to address longstanding border disputes, including the contentious Ambalat Block, a commitment made during a bilateral meeting between President Prabowo Subianto and Malaysian Prime Minister Anwar Ibrahim at the Presidential Palace in Jakarta on Friday, June 27, 2025.

“For example, on border issues, we agree that while some matters may still require time to be resolved technically, the principle is that we will seek solutions that benefit both sides,” President Prabowo spoke during a joint press conference after the meeting.

In regards with Ambalat, Prabowo said that both countries have agreed to begin economic cooperation while continuing legal and diplomatic discussions.

“In the case of Ambalat, we agreed that while we continue resolving legal matters, we will initiate joint development. Whatever we find in those waters, we will exploit it together,” he said.

“We agree that our efforts must serve the interests of our nations and our people,” Prabowo added.

Decades-long conflict

The Ambalat Block, spanning roughly 15,235 square kilometers, lies in the Sulawesi Sea (Makassar Strait) and is rich in oil and gas reserves, making it a highly strategic and economically valuable zone for both countries. The dispute stems from overlapping maritime claims between Indonesia and Malaysia.

The conflict traces back to August 1969, when Malaysia enacted the Essential Powers Ordinance, unilaterally establishing a 12-nautical-mile territorial sea limit based on straight baselines, in line with the 1958 Geneva Convention on the Territorial Sea and Contiguous Zone.

In December 1979, Malaysia released a new map − the 1979 Malaysia Map − that expanded its maritime claims in the Sulawesi Sea to include the Ambalat seabed. This unilateral move triggered formal protests not only from Indonesia but also from several regional neighbors. Indonesia named the disputed area Ambalat Block and consistently challenged Malaysia’s claim.

Malaysia argues that each island is entitled to its own territorial waters, exclusive economic zone (EEZ), and continental shelf, while Indonesia and other neighboring states view the 1979 map as an overreach of maritime sovereignty.

Previously, the 1979 map drew criticism not just from Indonesia, but also from countries such as the Philippines, Singapore, Thailand, China, and Vietnam, all of whom regarded it as an overextension of Malaysian maritime claims.

● The Philippines and China objected to Malaysia's claim over parts of the Spratly Islands;

● Singapore protested over Pedra Branca (Pulau Batu Puteh) in April 1980;

● Vietnam, Taiwan, Thailand, and the UK on behalf of Brunei also filed objections.

These widespread objections underscored the lack of international recognition for Malaysia’s claims under the 1979 map.

Shift toward cooperation

The decision by Indonesia and Malaysia to collaborate on the Ambalat issue through joint development marks a significant shift in approach, emphasizing mutual benefit over unilateral claims. It also reflects a broader regional trend of conflict de-escalation and economic diplomacy, especially in areas with overlapping maritime interests.

If successfully implemented, the joint development model could serve as a blueprint for resolving other territorial disputes in the region.