Banks not supportive of shipping sector: INSA<\/p>\n
JAKARTA (JP): The Indonesian Ship Owners Association (INSA)
\nhas complained that Indonesian banks are not supporting efforts
\nto develop the country's shipping sector.<\/p>\n
"Many foreign banks offer credit for ship procurement. But due
\nto the absence of local bank guarantees, they cannot provide such
\ncredit to Indonesian shipping companies," INSA chairman Firdaus
\nWadjdi said here over the weekend.<\/p>\n
He said that his association suggested to the Ministry of
\nFinance that it set up a financial institution to provide
\nfinancial guarantees for the association's members to acquire the
\nneeded credit.<\/p>\n
The credit is urgently required to help shipping companies
\nprocure new ships, he said.<\/p>\n
Speaking to reporters on the sidelines of the association's
\ntwo-day working meeting over the weekend, which was attended by
\n150 members, he said that such a financial facility would
\nsupport the efforts to reduce the increasing deficit in the
\nshipping sector.<\/p>\n
Director General of Sea Transportation Soentoro estimated in
\nSeptember that the shipping services deficit would account for
\nnearly 25 percent, or US$2.1 billion, of the country's current
\naccount deficit, projected to reach US$8.7 billion this fiscal
\nyear.<\/p>\n
The deficit resulted from more than 97 percent of the
\nIndonesian cargo transported to and from international
\ndestinations last year being carried by foreign ships. The
\nvolume of Indonesia's international cargo exceeded 287.89 million
\ntons last year.<\/p>\n
In the domestic cargo market, foreign shipping companies
\ncontrolled 48 percent of the total cargo volume of 154.7 million
\ntons.<\/p>\n
According to Firdaus, the lack of ships owned by local
\nshipping companies caused the foreign domination.<\/p>\n
"It is very difficult for us to procure new ships because of
\nthe high interest rate," he said, adding that the local interest
\nrates were as high as 22 percent.<\/p>\n
He said that his association was pursuing negotiations with
\nthe government to allow local shipping firms to carry state-owned
\ncompanies' cargoes, which currently were mostly carried by
\nforeign shipping firms.<\/p>\n
He also said that a number of Indonesian shipping companies
\nplanned to set up a consortium as a way to break the foreign
\ndomination of the country's cargo market. (bnt)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/banks-not-supportive-of-shipping-sector-insa-1447893297",
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