Association calls on government to deregulate shipping industry<\/p>\n
JAKARTA (JP): The country's shipowners urged the government on
\nTuesday to cut taxes and ease bureaucratic procedures in the
\nshipping industry to help it convalesce from its financial
\nturmoil.<\/p>\n
Firdaus Wadjdi, the chairman of the Indonesian National
\nShipowners Association (INSA), said local shipping companies were
\nalso hurt by the government's lack of support.<\/p>\n
\"We appeal to the government to pay attention to the shipping
\nindustry and to create good policies to build a conducive
\nbusiness climate. Otherwise, more local shipping firms will just
\nmove their business base overseas,\" he said.<\/p>\n
He said several local companies had moved their bases
\nelsewhere, such as Samudera Shipping Ltd., which moved its base
\nto Singapore in 1993 due to bureaucratic obstacles and
\nundesirable tax policies in the country.<\/p>\n
\"Several other companies are likely to follow suit. Djakarta
\nLloyd has planned a move to Singapore, too, because the country
\nprovides a more conducive climate for the shipping business,\" he
\nsaid on the sidelines of the 25th annual general meeting of the
\nFederation of ASEAN Shipowners Associations (FASA).<\/p>\n
The meeting was attended by delegates from the Filipino
\nShipowners Association, Malaysian Shipowners Association,
\nSingapore Shipping Association, Thai Shipowners Association and
\nVietnam Shipowners Association.<\/p>\n
Firdaus said tax and bureaucracy problems along with the lack
\nof financial capability and skilled crews have made local
\nshipping companies unable to compete with foreign shipping lines
\nin transporting cargo to and from Indonesia.<\/p>\n
He said the downturn in the country's shipping industry was
\nreflected in the fact that the market share in international
\ntrade had plunged to a mere 3.8 percent from between 46 and 47
\npercent in the 1980s.<\/p>\n
He added the country ranked fourth in Southeast Asian
\ncountries in terms of numbers in its fleet, compared to its first
\nposition in the 1980s.<\/p>\n
Criticism against the government's lack of support in the
\nlocal shipping industry was also voiced by Soedarpo Sastrosatomo,
\nchairman of Samudera Shipping Ltd., a subsidiary of Samudera
\nIndonesia Group.<\/p>\n
\"The (Indonesian) government is never serious with helping the
\nlocal shipping industry. It is only lip service when they say
\nthey want to develop the country's maritime strength,\" he said.<\/p>\n
\"The difference between doing business in Singapore and in
\nIndonesia is like night and day. Doing business in Indonesia is
\nso costly and full of bureaucratic barriers,\" he added.<\/p>\n
In a bid to help the country's ailing shipping industry, the
\ngovernment lifted the 10 percent value-added tax (VAT) on the
\npurchase and lease of ships, docking and port services early this
\nyear.<\/p>\n
The shipowners, however, said the VAT lift was not enough as
\nthere were still some excessive charges, including the 1.2
\npercent corporate tax and the mountainous levies imposed by the
\nport authority and other related agencies.<\/p>\n
Minister of Communications Agum Gumelar, who officially opened
\nthe FASA meeting, acknowledged governmental regulations had
\nfailed to develop the country's shipping industry and made local
\nshipping unable to compete with foreign shippers.<\/p>\n
He said national shipping companies transported only 3.85
\npercent of the country's exports and imports totaling about 226.9
\nmillion metric tons, leaving the remaining bulk for foreign
\nshipping companies. (cst)<\/p>",
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