T

he government is introducing a mechanism that will allow businesses to process permits for their export and import activities under one roof in a coordinated effort to slash stubbornly high dwell times at the country'€™s ports.

The new mechanism, dubbed '€œIndonesia Single Risk Management'€, is set to be integrated with the country'€™s export-import licensing portal known as the Indonesian National Single Window (INSW), where every registered business player will be given a single identity to apply for export and import permits.

The introduction of the single identity measure is to be followed by the integration of export and import data currently managed by 18 different ministries and agencies, including the Agriculture Ministry, the Trade Ministry, the Industry Ministry and the Transportation Ministry.

'€œThe effectiveness of surveillance will improve through the risk management integration among ministries and agencies,'€ read a statement from the Office of the Coordinating Economic Minister.

Coordinating Economic Minister Darmin Nasution said the new mechanism, which is part of the government'€™s 11th economic policy package introduced on Tuesday, would help cut the average dwell time at the country'€™s seaports from 4.7 days in late 2015 to 3.5 days by the end of this year.

In the initial phase, the mechanism would be implemented between the Finance Ministry'€™s customs and excise directorate general and the Food and Drug Monitoring Agency (BPOM), Darmin explained.

The implementation of the mechanism is set to become compulsory across all ministries and agencies in August.

The government seeks to reduce dwell times even further, to an average of three days, by the end of 2017.

Dwell time indicates the average length of time that a container spends at a seaport terminal. A short dwell time means more efficient shipping procedures and lower logistical costs.

At present, Indonesia ranks 109th in the World Bank'€™s ease of doing business index, having risen by one notch only from last year'€™s position. Singapore continues to top the list, while Malaysia sits at the 18th position.

The two neighboring states fare better than Indonesia in terms of port dwell times, with Singapore'€™s at 1.5 days and Malaysia'€™s at three days.

High dwell times in Indonesia have been highlighted in a recent World Bank report as indications that there are too many institutions issuing and implementing regulations.

'€œThis fragmentation means that laws and regulations are developed independently by each ministry, resulting in frequent conflicts of interest,'€ the World Bank'€™s latest Indonesia Economic Quarterly report states.

Last June, President Joko '€œJokowi'€ Widodo sunk his teeth into the stubbornly high dwell times, which begin from the moment a vessel moors at a port to the moment its cargo is unloaded and leaves the port, or from when the cargo arrives at the port until it is loaded and the ship departs.

The president, a successful furniture exporter prior to his entry to politics, even pledged to dismiss officials, including ministers, for their failure to overcome lengthy dwell times.

Maybank Indonesia chief economist Juniman and Bank Central Asia chief economist David Sumual said the new policies would be effective at stoking growth in the medium term.

'€œThe big picture lays in economic growth. The single risk management mechanism, for instance, will open up clogs at ports, thus accommodating higher movement of goods for economic activities,'€ Juniman said.

Since last year, Indonesia has introduced a series of economic packages in efforts to boost economic growth and improve the investment climate.

In addition to efforts to slash dwell times, the government'€™s latest economic package focuses on the micro credit program (KUR), real estate investment trusts (REIT) and the health industry.

The government decided to widen the customer base for subsidized KUR loans to include owners of micro-, small- and medium-sized enterprises with an export orientation.

'€œThe KUR will enable them to access affordable financing at an interest rate of 9 percent, the same rate offered by the existing KUR,'€ Darmin said.
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