T

o be blunt, we should say the new trade minister, Thomas Trikasih Lembong, like his predecessors, cannot contribute much directly to boosting exports because most of the factors that influence the competitiveness of our manufactured exports lie under the jurisdiction of other ministries.

The biggest problem of our exports is the poor infrastructure that makes Indonesia'€™s logistics costs among the highest in the ASEAN region and the biggest contributors to these punitive costs are inefficient seaport handling, land transportation services and cumbersome customs clearances that are beyond the trade minister'€™s authority.

Inefficient and often corrupt customs clearances, for example, delay the release of imports even while the manufacturing sector depends mainly on imported basic and intermediate materials, components and parts.

 Hence, the top priority job of the minister is to ensure smooth distribution of goods, notably such staples as rice, cassava, fish, meat and poultry, and to maintain price stability. Price stability is key to controlling inflation, while low inflation is crucial for preventing the rupiah from experiencing wild volatility.

But again, even in the area of price stability, the biggest problems '€” the inadequate capacity of sea and land transportation '€” are outside the trade minister'€™s authority.

Connectivity between the major islands is simply poor, thereby hindering the flow of goods from surplus to deficit areas. Hence, Thomas needs the support of the coordinating economic minister, Darmin Nasution, to solicit better cooperation from other ministries.

 Related to the task of maintaining price stability is to ensure the smooth and timely importation of staple goods. Again, Thomas needs the strong support of the Central Statistics Agency and the Agriculture Ministry to enable him to conduct a good balancing act between securing the imports to cover the domestic deficit and watching out for the interests of local farmers by getting them fair prices for their produce.

Imports of such commodities as rice, sugar and dairy products have always been sensitive issues. Import licenses for these commodities are issued by the Trade Ministry on the basis of recommendations from the Agriculture Ministry, which in turn depends on production and consumption data from the Central Statistics Agency for determining the right volume of imports.

Since imports of staples are restricted to companies with special import licenses, this business usually generates very high margins. No wonder the import licensing system, including the process of getting recommendations from the Agriculture Ministry, has always been a mechanism of corruption. In fact, several senior officials in charge of import licensing are now under police investigation on allegations of corruption.

Therefore, Thomas needs to strengthen the internal control of officials in charge of import licensing by quietly monitoring their lifestyles to detect early on any signs of malfeasance.

Thomas'€™ other tasks include the full enforcement of the 2014 Trade Law, which internationally is considered rather protectionist because the new legislation emphasizes managed trade, instead of free trade, to protect domestic industries and consumers. Thomas should ensure that our trade policies do not violate the rules of the World Trade Organization.