Thousands of levies hamper exports

JAKARTA (JP): Director General of International Trade Anang Fuad Rivai admitted yesterday that the imposition of over 4,000 levies and the existence of rampant red tape have hampered the development of Indonesia's exports.

Speaking at a hearing with members of the House of Representatives' Budgetary Commission, Anang said that in spite of a series of deregulation measures issued by the government in recent years, a total of 4,396 levies are still imposed on business activities at various levels.

The levies consist of 195 fees imposed by local administrations under the orders of the central government, 941 fees imposed by provincial administrations and 2,802 fees levied by mayoralty and regency administrations.

Apart from that, 419 fees are imposed by local administrations by orders of governors and 39 by various trade associations.

"But the government will continue with its deregulation and reduction of bureaucracy, which will include the removal of levies imposed both directly and indirectly on export-related activities," Anang assured.

He refused to elaborate on the total value of the levies, but the Indonesian Chamber of Commerce and Industry said earlier this year that the amount of levies -- both legal and illegal -- could be up to 27 percent of a commodity's production costs.

Anang said yesterday that in spite of fluctuations Indonesia's trade balance during the 1991-1995 period enjoyed a surplus which increased by an average of 10 percent a year.

Indonesia's trade surplus, for example, increased from US$3.27 billion in 1991 to $6.68 billion in 1992 and to $8.49 billion in 1993. In the following year, however, the trade surplus declined to $8.07 billion and plunged to only $4.79 billion in 1995.

Anang explained that most of the surplus during the 1991-1995 period came from oil and gas exports. From its international trade of non-oil products, however, Indonesia continued to suffer a deficit except during 1993 and 1994, when it gained a surplus of $846.8 million and $743.7 million, respectively.

Last year, non-oil trade suffered a $2.76 billion deficit when imports went up by 27 percent while exports grew by only 13.4 percent.

Anang said that in the last two years, Indonesia suffered a trade deficit with 12 major trade partners, including Japan, Germany, Australia, South Korea, Taiwan and China.

Last year, for instance, Indonesia suffered a deficit of $2.49 billion in its trade with Japan, $1.43 billion with Germany, $1.25 billion with Australia, $956 million with South Korea, $727 million with Taiwan and $447 million with China.

Anang explained that his office is currently carrying out a number of measures to offset the deficits.

The measures include identifying the products which are most needed by Indonesia's trade partners, conducting trade diplomacy to expand the country's export market and identifying the problems curbing export growth.

Anang said his office carries out routine meetings with related government offices and conveys the problems his office identifies to the national deregulation team to be followed up. (pwn)