Import activities drop 80 percent: Ginsi
JAKARTA (JP): The Indonesian Importers Association (Ginsi) said yesterday that import activities had dropped more than 80 percent over the last few months.
Association chairman Amirudin Saud said the sharp drop in imports, which totaled US$41.67 billion last year, was caused by the refusal of most Indonesian letters of credit (L/C) by foreign banks.
Moreover, most local banks, which are suffering from a liquidity crisis, require importers to pay up front the full amount of the L/Cs they want to open, Amiruddin added.
"Most of the remaining import activities now are based on the trust built from long-term relationships between buyers and their foreign partners, which allow transactions without L/Cs," Amirudin told reporters at his office.
Latest official data showed total imports declined by 35.2 percent in March to US$2.37 billion compared to those in the same month of last year.
Since the monetary crisis hit the country and shook the banking sector, most L/Cs issued by local banks have been turned down by overseas banks.
Amirudin said some companies, which have had business relationships with foreign companies for as long as 20 years, were allowed to import goods without L/Cs under credit payments of up to six months.
"In some cases, foreign partners deal in raw materials which cannot be kept for too long so that they often don't have much of a choice but to sell to the Indonesian importers, even without an L/C," he said.
Commodities which are still being imported include chemical materials, textiles and medicines.
Importers unable to continue their activities have simply deposited their funds at local banks to earn high interests for paying order to pay their workers, he said.
A foreign businessman, whose company supplies iron and steel to Indonesia, complained yesterday that he had yet to receive payments from Bank Danamon, which issued the L/Cs for his goods.
Since Danamon's management was taken over by the Indonesian Bank Restructuring Agency (IBRA), the agency has not paid any of its debts, said the businessman, who asked for anonymity.
IBRA is supposed to meet all business obligations of the banks put under its supervision.
"IBRA has made promises but has given no solid dates. Meanwhile, nobody who has claims on IBRA has been paid," he said.
"How do you expect creditors to supply more goods, if we do not even know when we'll get paid?" he said.
Commenting Soehardjo's resignation last week as the director general of customs and excise, Amirudin called on the government to appoint a new head from the ranks within customs and excise office.
"We heard that Minister of Finance Bambang Subianto will appoint someone from outside the customs service to replace Soehardjo," Amirudin said, referring to reports that Martiono Hadianto, former director general of state-owned companies, would replace Soehardjo.
Amirudin warned the government against repeating its past mistakes of placing an "outsider" to the top position at the customs and excise office.
From 1970 to 1991, all the directors general were appointed from outside, causing disorder in the system, he said.
Soehardjo, a brother-in-law of former president Soeharto, resigned Friday, saying he was not capable of speeding up reform and modernization in the customs and excise office. (das)