Businesspeople protest Lloyd's war risks labeling<\/p>\n
Fitri Wulandari, The Jakarta Post, Jakarta<\/p>\n
Businesspeople are protesting the labeling of Indonesia as a
\nwar-risk zone by a London-based insurance committee linked with
\ninsurance giant Lloyd's, saying the classification was unfair and
\nwould adversely affect the flow of goods into and out of the
\ncountry.<\/p>\n
Barens TH Saragih, chairman of the Indonesian National
\nShipowners Association (INSA), said the association would ask the
\nMinistry of Finance to file a protest with Lloyd's.<\/p>\n
He also questioned the reasoning for the classification,
\nsaying that Lloyd's did not list the United States as a war-risk
\nzones after the Sept. 11 terrorist attacks there last year.<\/p>\n
\"It is unfair. Indonesia is not an open war zone and the
\nbombing only happened in Bali. Why didn't (Lloyd's) do the same
\nto the U.S.? It is completely baseless,\" Barren told The Jakarta
\nPost on Friday.<\/p>\n
Anton J. Supit, chairman of the Indonesian Footwear
\nAssociation (Aprisindo), also criticized the decision, saying it
\nwould hurt the country's trade activities.<\/p>\n
Shortly after the bombing in Bali that killed more than 180
\npeople, mostly foreign vacationers, the London-based Joint Hull
\nCommittee issued a marine hull war risks cancellation notice.<\/p>\n
The notice, which took effect on Thursday, called on insurance
\nand reinsurance firms to cancel or amend all contracts with
\nvessels sailing to Indonesia. Additional premiums will be applied
\nshould ship operators insist on entering Indonesian waters.<\/p>\n
According to the Directorate General of Sea Transportation,
\nIndonesia currently has 2,109 ports, of which 140 are open to
\nforeign ships with the other 1,973 for local vessels only.<\/p>\n
Barens predicted the marine hull premium would increase the
\ncurrent fees 15 percent, which amounts to 3 percent to 4 percent
\nof a ship's price. However, he said, the rates would vary
\ndepending on the underwriter.<\/p>\n
\"It's a big increase for us,\" Barens stressed.<\/p>\n
According to Barens, all insurance firms in Indonesia reinsure
\ntheir clients with Lloyd's, which controls 80 percent of the
\nworld's insurance market.<\/p>\n
A marine hull insurance expert, Nico Lukum, said the country's
\ninsurance industry must make clear the true situation in
\nIndonesia to the international insurance market.<\/p>\n
\"It is possible the international insurance market has the
\nwrong perception about Indonesia after the bombing. The
\nIndonesian Insurance Council (DAI) must clarify this,\" Nico, who
\nworks at state-owned insurance firm Jasindo, told the Post.<\/p>\n
Nico said that DAI must also question the decision by Lloyd's
\nto include Indonesia on its list of war-risk zones.<\/p>\n
It is feared increased premiums will disrupt the country's
\ninternational trade, as it will raise transportation costs for
\nIndonesian exports and imports.<\/p>\n
\"Our export goods will not be competitive because they will
\nbecome too costly and the import goods will become more
\nexpensive,\" Anton said.<\/p>\n
According to INSA, 94.6 percent of the country's exported and
\nimported goods, which total 350 million tons annually, are
\ntransported by foreign ships. A mere 5.4 percent is transported
\nby locally owned ships.<\/p>\n
As for imports, Anton said, domestic consumers would have to
\npay higher prices for imported goods.<\/p>\n
\"Eventually, the consumers at home have to pay for the
\nincreased transportation costs,\" he said.<\/p>\n
Anton also warned that exports might decline with
\ninternational importers likely to turn to other countries
\noffering cheaper goods.<\/p>\n
For the past three years, the country's exports have steadily
\ndeclined from US$62.02 billion in 2000 to $56.03 billion in 2001
\nand $27.38 billion for the first half of 2002.<\/p>\n
With declining investment, the country now relies on exports
\nand domestic consumption to drive economic growth.<\/p>\n
Analysts say the country needs to post economic growth above 5
\npercent per year for many years to come to absorb the country's
\nhuge number of unemployed. But, they say, following the Bali
\nbombing the country's growth is likely to reach only 3 percent
\nthis year.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/businesspeople-protest-lloyds-war-risks-labeling-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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