Govt should eliminate nontariff barriers: Ginsi

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)