ASEAN KEY DESTINATIONS
Indonesia needs to improve logistics
Ministry official Sumaryanto Widayatin said on Thursday that state companies should speed up development of national connectivity in line with the Master Plan for the Acceleration and Expansion of Indonesian Economic Growth (MP3EI).
In the World Bank’s 2010 Logistic Performance Index, Indonesia ranked behind fellow Association of Southeast Asian Nations members Singapore, Malaysia, Thailand, the Philippines and Vietnam because of high ports charges and poor port infrastructure and services.
“We need to cut logistics costs,” Sumaryanto said. “Today, logistics account for about 30 percent of production costs and 24 percent of our gross domestic product, while our neighbors like Vietnam, Thailand, and Malaysia have reduced logistics costs to 10 percent.”
The Asean Economic Community, slated to start in 2015, plans to develop a single market involving the free flow of goods, capital and skilled workers. The network greater competition between businesses in the region.
In a bid to reduce logistics costs and promote connectivity, 16 state enterprises on Thursday signed a memorandum of understanding to form the Indonesia Logistics Community Services.
The ILCS represents cooperation between state sea port operator Pelindo II and state telecommunication company Telekomunikasi Indonesia to develop an integrated electronic system for logistic services. Other signatories are state companies in the transportation and infrastructure sectors who intend to support national connectivity.
“Enhancing national connectivity, in hard infrastructure or soft infrastructure, is a must,” Pelindo II president director Richard Lino said at the signing of ILCS in Jakarta. “The ILCS goal is to connect centers of growth and connect remote and under-developed areas.”
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