Bonded zones seen reducing RI's current account deficit

JAKARTA (JP): Bonded zones, despite hosting export-oriented companies, cannot help but reduce the country's current account deficit, legislators have said.

When visiting state-owned bonded zone operator PT Kawasan Berikat Nusantara, a number of legislators from the House Budgetary Commission said the export value of companies in the bonded zones were almost the same as the value of imports, when freight and insurance was factored in.

"Although most products from bonded zones are bound for exports they do not contribute significantly to our balance of payment figure, because most of the products were produced using imported inputs," legislator Tadjudin Noer Said said.

Kawasan Berikat Nusantara's president, Mursono Siswohardjono, said the local content of goods produced in bonded zones was around 10 percent.

Data from Kawasan Berikat Nusantara showed exports from all bonded zones in the country increased 10 percent to US$1.26 billion last year, of which $367.3 million was contributed by bonded zones managed by private firms. At the same time, imports to all bonded zones rose by 14.5 percent to $897.7 million.

"If we calculate how much we have to pay for freights, insurance and foreign workers in the bonded zones, we might come to the conclusion that bonded zones do not help reduce the current account deficit," Tadjudin said.

Another legislator, Bomer Pasaribu, said most industries coming to Indonesia's bonded zones were to benefit from Indonesia's relatively low-level labor wages.

He suggested bonded zone operators attracted high-tech companies or those which would use more local products as their raw material.

Kawasan Berikat Nusantara currently has three bonded zones: a 173-hectare zone in Cakung; a 10-hectare zone in Tanjung Priok, and a 410-hectare zone in Marunda -- all in North Jakarta.

The three bonded zones harbor 63 foreign-investment firms and 86 domestic-investment firms. Almost 70 percent of those companies were working on garments, and the remaining on electronic and other industries.

They employ 72,820 local people -- 80 percent of them female -- and 518 foreigners.

There are currently eight bonded zones managed by private companies. They are a 76-hectare MMID bonded zone in Cibutung, a 24-hectare Cibinong Center Industrial Estate and a 50-hectare Indo Taisei Indah Development in Cikampek -- all in West Java.

The other four zones include a 200-hectare Lamhotma bonded zone in Medan, North Sumatra, a 56-hectare zone in Bintan, Riau, an 84-hectare Lami Citra zone in Semarang, Central Java, the 50- hectare Pasuruan Industrial Estate and the 35-hectare Ngoro Industrial Estate in Mojokerto, both in East Java.

All bonded zones managed by private firms are under the supervision of Kawasan Berikat Nusantara, especially in terms of issuing certificate of origin for exports and labor-related business.

Mursono said he was told to focus more on employment than foreign exchange. Thus, his company's promotional activities aimed to attract more relocations of labor-intensive industries from more advanced countries.

He said bonded zones remained attractive for relocation of export-oriented firms although the government offered various incentives for export-oriented firms situated outside bonded zones.

"Currently we have four foreign investors on our waiting list. It shows we remain attractive," Mursono said. (rid)