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.