New shipping policy needs financial support

JAKARTA (JP): The government's move to allow imports of used cargo and fishing vessels needs financial and fiscal support, says a member of the House of Representatives.

Bomer Pasaribu of the House Budgetary Commission said here yesterday that the deregulation measure would not achieve maximum results without such support.

"Support could be in the form of credit with low interest rates, or value-added tax and customs tariff exemptions," Pasaribu was quoted by Antara as saying.

This could reduce the country's widening current account deficit in the transportation sector, which was one of the main aims of the shipping sector deregulation measures, he said.

The current account deficit in the transportation sector is about US$3 billion.

About 92.2 percent of exports and imports are carried by foreign ships, and only 2.8 percent by domestic ships.

The government announced a deregulation package Monday, which lifted a ban on importing used ships.

The government banned importing the ships to help domestic ship builders, but the measure failed.

Pasaribu said the deregulation could reduce the extra cost of using foreign freighters for inter-island transportation.

"Foreign cargo vessels no longer carry export and import goods, but they have entered the inter-island transportation business," he said.

He said Indonesia needed to take serious action to strengthen its marine transportation sector as Singapore and Hong Kong have done. (das)