Govt should eliminate nontariff barriers: Ginsi
JAKARTA (JP): Importers urged the government yesterday to abolish immediately nontariff barriers on imports of chemical and plastic products to cut the soaring production costs of local industries.
Chairman of the Indonesian Importers Association (Ginsi) Amirudin Saud said the elimination of the import barriers would lower the domestic selling price of imported items by about 30 percent.
There are 191 commodities which at present should be imported through certain importing companies. They include chemicals, plastics, and milk.
"The barriers should be abolished so that those commodities could be sold at lower prices on the domestic market," he told reporters after meeting the Coordinating Minister for Development Supervision and Administrative Reforms Hartarto Sastrosoenarto.
According to Amirudin, the collapse of the rupiah against the U.S. dollar has caused prices of imported goods to rise by more than 300 percent in rupiah terms. The elimination of the import barriers would enable the importers to cut their selling prices, he said.
He explained that under the existing trading mechanism, importers are required to pay a 5 percent to 10 percent fee to certain companies appointed to administer the restricted commodities.
"The special importing companies must no longer exist," he said, adding that many of the appointed importers were not actually importers but merely doing administrative work.
He pointed out on state-owned trading companies PT Tjipta Niaga, PT Kerta Niaga, and PT Dharma Niaga.
"We import the products but we have to get some papers from the companies to get our imports from the port," Amirudin said.
Amirudin said that in addition to the administration fee, the importers of the 191 commodities had to pay an import duty of up to 35 percent.
In its agreement with the IMF, the government promised to eliminate all nontariff barriers as part of the sweeping economic reforms, but no target date has been decided.
Tariff barriers on most products have been cut to 5 percent. Chemical, metal and fishery products wills also be reduced to between 5 percent and 10 percent in 2003.
L/Cs
Indonesian importers have also been badly hit by the rejection of Indonesian letters of credit (L/Cs) since confidence in the local banks collapsed.
The L/C guarantees provided by Bank Indonesia and certain foreign governments have not been effective because local banks have demanded importers provide 100 percent of the cash up front to open an L/C.
Amirudin also asked the government to return the loading and unloading of commodities to shipping companies to make the process more efficient.
He pointed out that the current loading and unloading process done by private companies could take more than 21 days which was considered too long and exceeded the time limit allowed by insurers.
He explained that the loading and unloading companies at Tanjung Priok port, which handle some 70 percent of the country's import and export activities, have enjoyed an annual profit of around Rp 1 trillion (US$77 million) from processing 40 tons of exports, imports and intra-island trade activities.
"This large amount of money should be given to the shipping companies to improve their operations," he said, adding that prior to 1985, the loading and unloading activities were handled by the shipping companies. (rei)