TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
State goes all out for efficiency
In an effort to make logistics more efficient, the government would form a task force to identify the cause of high logistical costs in Indonesia, particularly related to bureaucratic red-tape, Coordinating Economic Minister Sofyan Djalil said on Tuesday
Change Size
I
n an effort to make logistics more efficient, the government would form a task force to identify the cause of high logistical costs in Indonesia, particularly related to bureaucratic red-tape, Coordinating Economic Minister Sofyan Djalil said on Tuesday.
The task force will comprise seven members from seven ministries: the Transportation Ministry, the Public Works and Public Housing Ministry, the State-Owned Enterprises Ministry, the Finance Ministry, the Maritime Affairs and Fisheries Ministry, the Agriculture Ministry and the Manpower Ministry.
According to Sofyan, the task force will be under the direct supervision of Vice President Jusuf Kalla, while Sofyan will act as coordinator.
'It will work to identify the problems swiftly,' Sofyan said after a limited Cabinet meeting in Jakarta on Tuesday.
'If necessary, the President said [he] will monitor [the team] weekly. Hopefully, within the next two months, all hindrances [related to] bureaucracy can be settled.'
The meeting, Sofyan added, also highlighted the low utilization of seaports across the country.
Despite an improvement in logistics in the latest World Bank Logistics Performance Index (LPI) issued last year, Indonesia remains one of the worst performers in Southeast Asia.
It ranked 53rd among 166 countries surveyed, lagging behind Vietnam (48th), Thailand (35th), Malaysia (25th) and Singapore (5th). Indonesia's logistical costs represent approximately 23.6 percent of the country's gross domestic product (GDP).
Sofyan said the target was to reduce the costs to 19 percent and expected the task force would also seek ways to adopt a similar method to the One-Stop Integrated Services (PTSP) concerning business licensing at the Investment Coordinating Board (BKPM).
In Tuesday's meeting, President Joko 'Jokowi' Widodo reiterated his belief that developing land, sea and air transportation and infrastructure would cut logistical costs.
'Transportation costs will become cheaper, logistical costs will become cheaper and the prices of staple [foods] will reduce significantly,' Jokowi said.
Meanwhile, Indonesian Logistics Association chairman Zaldy Masita questioned the establishment of the task force, as a similar effort in the past had proven to be ineffective, with solutions to improve logistics proposed by stakeholders but not implemented.
Last year, under then president Susilo Bambang Yudhoyono's administration, a task force was set up, chaired by then deputy finance minister Mahendra Siregar to cut lengthy dwelling times at Indonesia's busiest port of Tanjung Priok in North Jakarta, from six or seven days to four days. The progress report of the task force, however, remains unclear.
Zaldy added that enhancing efficiency in seaports was key to reducing logistical costs.
'The port authorities should exert more power to synchronize all work under one command. As long as there is no inter-institutional authority to rule related bodies at ports, addressing the issue will remain difficult,' Zaldy told The Jakarta Post.
Indonesian National Shipowners Association chairwoman Carmelita Hartoto supported the government's move to set up the task force as it may help reduce high logistical costs.
