Cargo lanes crucial for EAGA success

Cargo lanes crucial for EAGA success

By Hendarsyah Tarmizi

MANADO, North Sulawesi (JP): Brunei and the Philippines have
appealed to Indonesia to establish more shipping and air routes
from Sulawesi and Kalimantan to neighboring countries to boost
trade among members of the East ASEAN Growth Area (EAGA).

Muhammad Alimin, a member of the Brunei delegation at the
senior official meeting of the EAGA member countries, said that
the lack of direct air routes and shipping lines discourages
trade activities.

Besides Brunei, the Philippines and Indonesia, EAGA also
includes Malaysia.

Alimin said that importing goods from Sulawesi or Kalimantan
through the Tanjung Perak port in Surabaya of East Java or
Tanjung Priok port in Jakarta would be much costlier for Brunei
than buying goods from other neighboring countries.

"The establishment of direct shipping routes and air links is
crucial in creating the eastern ASEAN region as a sub-regional
center of growth," he told newsmen at the end of a two-day senior
official meeting of the EAGA members on Tuesday evening.

The meeting was followed by EAGA's second ministerial meeting
yesterday.

The EAGA economic cooperation was proposed by Philippine
President Fidel Ramos in 1992 to create a free trade zone
encompassing Maluku, Sulawesi, West and East Kalimantan in
eastern Indonesia, the Philippines' southern Mundane island,
Brunei as well as Malaysia's eastern states of Sarawak and Sabah.
The proposal was endorsed during the EAGA's first ministerial
meeting in Davao in southern Philippines in April this year.

The EAGA is the third sub-regional cooperation in the
Association of Southeast Asian Nations (ASEAN) after the Sijori
triangle of growth involving Indonesia's Riau province, Singapore
and the Malaysian state of Johor and the Indonesia-Malaysia-
Thailand-Growth Triangle, encompassing Indonesian provinces of
North Sumatra and Aceh, western parts of Malaysia and Thailand's
southern areas.

The senior officials meeting on Monday and Tuesday hammered
out reports of working groups established during the first
ministerial meeting to identify the possible improvement of sea
linkages, transportation and shipping services as well as to
forge out possible cooperation in the fields of fishery,
forestry, energy and human resource development. The officials'
recommendations got approval from ministers yesterday.

Antonio S. Peralta, a member of the Philippine delegation,
shared Alimin's view that without shortening shipping routes,
importing goods from Sulawesi and other parts of eastern
Indonesia will not be viable for the Philippines due to high
freight costs.

Shipping

Asked about shipping problems, Indonesia's Director General
for Sea Transportation Soentoro said the government is studying
the possibility of developing a sea port in eastern Indonesia
into a cargo consolidation center to facilitate export and import
activities to other members of EAGA.

"The Bitung port and Samratulangi airport both in North
Sulawesi are also being prepared to become distribution centers
of goods from eastern Indonesia," he told newsmen.

Local economists and businessmen said the lack of direct
shipping lines and air connections is not the only obstacle in
integrating eastern Indonesia's economy to other parts of ASEAN
countries.

John WT Lengkey, chairman of the North Sulawesi chapter of the
Indonesian Chamber of Commerce and Industry, said complicated
investment procedures are also a major handicap.

He said foreign investors are still required to obtain a
license from the Investment Coordinating Board in Jakarta to run
a business in provinces including North Sulawesi.

"It does not only take time but it is also very costly as
investors have to frequently go to Jakarta to process business
licenses," he said.

He understood that the government has established a special
team comprising of 14 ministers to speed up the process of
eastern Indonesia's economic integration into the EAGA economic
framework.

"But it is just a political will. We need a real action," he
said of the government's slow response to the growing business
opportunities in the sub-region.

A similar complaint was expressed by JWP Mandagie, a noted
economist in North Sulawesi. Indonesia is lagging far behind
other EAGA members in benefiting from the growing business
opportunities, he said.

"The Philippines, Brunei and Malaysia have already talked
about the free trade concept while Indonesia is still busy with
its bureaucratic problems, " Mandagie said.