Tue, 06 Mar 2001

Japan helps Indonesia make new shipping strategy

JAKARTA (JP): The government has received financial assistance from the Japanese government to study and formulate a new strategy to help develop the country's ailing shipping industry, a senior government official said.

Director general of sea communication at the ministry of communication and transportation Tjuk Sukardiman said the Japanese government's Japan International Cooperation Agency (JICA) had provided a US$1.8 million grant to finance the study.

"In cooperation with JICA, Japan Society for the Promotion of Science (JSPS), the ministry and communication and transportation along with the ministry of industry and trade expect to complete the study this year," Sukardiman said on Friday after a seminar on the country's shipping industry.

The seminar was attended by delegates from JICA and JSPS.

He said the study is part of preparations for the implementation of the new government regulation No. 82/1999 on water transportation. The regulation, which was issued on Oct. 7, 1999, will take effect on Oct. 5, 2001.

It will replace government regulation No. 17/1988, which is widely considered to have failed in developing the country's shipping industry and reduce the domination of foreign-flagged ships in Indonesian waters.

"Our shipping industry really is in a miserable condition.

"If we don't fix it (the system), we'll certainly lose out to tough competition," he asserted.

He said the study financed by JICA would also outline strategies to develop the country's shipbuilding industry and repair services.

Quoting the ministry's 1999 data, Sukardiman said local shipping companies took only a 4.79 percent share in the shipment of goods to and from the country, while its share in domestic trade stood at 50.4 percent.

He blamed foreign-flagged cargo ships as an important factor behind the growing domestic balance of payment deficit.

"The domination of foreign shipping companies are mostly to blame for the balance of payment deficit," he said.

According to Sukarman, the deficit in the country's balance of payments increased by between $200 and $300 million a year as from 1989, when the deficit hovered at $0.9 billion, to reach $6.9 billion in 1999.

Local ship-owners have often complained that the country's tax policies and bureaucratic obstacles have hampered the growth of the country's shipping industry.

The lack of financial capability and skilled crew have also made local shipping companies unable to compete with foreign shipping lines in transporting cargo to and from Indonesia. (03)