What Does the 15th Economy Policy Package Offer ?

Reza Maulana - 17/07/2017, 07:00

The government has just launched the 15th economic policy package in mid June, which is aimed at improving logistics in the country.


Economic Coordinating Minister Darmin Nasution said the package addressed four main aspects – enhancing the role of transportation insurance, reducing costs for logistic service providers, strengthening the Indonesia National Single Window (INSW) authority and reducing the number of prohibited and restricted goods.


“The insurance business is included in this economic package, because [insurance companies] are involved in the shipping of goods, in the shipyard business and in ship maintenance,” Darmin said.


In trying to reduce costs incurred by logistic service providers, the government aims to eliminate costs of sea transportation, shipping agencies, freight forwarding, loading and unloading services as well as port management.
Currently, those business activities incur certain costs, ranging between Rp 2 billion (US$150,568) and Rp 500 billion. Under the new policy package, these costs will be eliminated.


Meanwhile, the details on strengthening the INSW authority and setting up an export-import task force to reduce the list of prohibited and restricted goods would be specified in the 16th and 17th economic packages, Darmin added.”We actually wanted to put those four focuses in one package, but that would take too long,” he said.


The 15th economic policy package covers:


1. Provide opportunity to strengthen the business role and scale through policies that provides opportunity for transportation business and enhancing the role of transportation insurance in export/import and improve the role of national shipbuilding industries.
2. Easy access to do business and reducing costs for logistic service providers through:

(i)    Reduce transportation operating cost;
(ii)    Eliminate requirements for cargo transportation permit;
(iii)    Alleviate the investment cost of seaport business;
(iv)    Standardization of documents for domestic goods flow;
(v)    Develop regional distribution centers;
(vi)    Ease of procurement of certain ships; and
(vii)    Mechanism for refund of container collateral fee; Etc

3. Institutional Development and Authority Strengthening of Indonesia National Single Window (INSW), through the following policies:

(i)    Provide independence function to INSW institution to be able to develop electronic system of service and supervision of export of import, customs, and seaport throughout Indonesia
(ii)    Take control over import export activities that have potential as illegal trading;
(iii)    Develop single risk management for smooth flow of goods and decreasing dwelling time; and
(iv)    As competent authority in ASEAN Single Window integration and safeguarding FTA implementation.

4. Simplify the trade procedure to support the smooth flow of goods, by establishing an Import Export Trade Team in order to reduce LARTAS from 49% to about 19% or near the average non-tariff barrier of ASEAN countries by 17%.
From the regulation aspects, there are 18 policies that have been done, including:


a.    Eliminating and issuing various ministerial regulations (12 ministerial decrees, 2 Circular Letters, 1 letter of the Coordinating Minister) that can promote business expansion and improve the competitiveness of national logistics service providers in establishing and developing the National Logistics System.
b.    Revise 3 Presidential Decree (Perpres) which are incorporated into 1 Perpres concerning INSW to accelerate the development and implementation of import and export,  customs clearance automation services, and seaport through strengthening the institutional and authority of Indonesia National Single Window (INSW)
c.    Issuing one Presidential Instruction (Inpres) for strengthening the Port Authority’s role in managing the smooth flow of port goods.
d.    Issue 1 Decree of the Coordinating Minister of Economy on the Import Export Trade Team.


Business Players Appreciate
Business players and related logistics-concerned institutions appreciated this government package, saying the package can help overcome the problem of logistics within the country and expand the market share of national players, including in oceangoing shipping.

“The problem of logistics in Indonesia has become a key bottleneck for a more efficient economy activities,” commend World Bank Representative Head for Indonesia Rodrigo A Chaves. “The package is expected to overcome the logistics bottleneck for a more efficient economy.”

Echoing the view, Johnson W. Sutcipto and Carmelita Hartoto, both are still claiming themselves as the Chairman and Chairwoman of Indonesia National Shipowners’ Association (INSA), also appreciated the package, saying this will encourage the national shipping competitiveness toward the global market.

“We appreciate the package and its related ministerial regulation drafts as they will increase the role of national shipping lines in oceangoing trade. It supports our beyond cabotage concept,” said Johnson.
Though they are still in conflict relating INSA, but Carmelita also has similar opinion relating the package. Carmelita said this package will give opportunity to realize the beyond cabotage concept. “The export of coal and CPO will be handled by national flag carriers,” she told the press.

Chairman of Asosiasi Logistik Indonesia (ALI) Zaldy Ilham Masita also appreciated this government strategy, saying this answered the logistics players demand to smoothen the flow of cargoes and to cut logistics cost.
“Hopefully, this will become the starting point of logistics reform in Indonesia,” he said.(dj)