National efficiency was still the
hot issue in the discourse of Indonesia’s economy; this issue was directly related
to the case of Indonesia’s downfall in rating of competitiveness recently.
The unpleasant news originated from
the release of the World Economic Forum (WEF) an Independent organization well
known for their annual meeting of global business leaders and political elite
of the word, intellectuals, and journalists in Davao, Swiss who rated
Indonesia’s economic competitiveness this year in 50th position
among 142 nations, falling by 4 grades against last year.
WEF’s release was indeed a heavy
blow on the Government of RI. Not only because Indonesia’s competitiveness was
way below neighboring countries like Malaysia (25), Brunei Darussalam (28),
Thailand (38) or Singapore (2) Not even because Indonesia ranked with third
world countries who were mostly poor countries in Africa.
WEF release was so painful because
Indonesia had been too overjoyed by some national economic indicators which
were perhaps sparklingly bright amidst the world’s gloomy economy. By Semester
1-2012 Indonesia’s Gross Domestic Product accumulatively arrived at growth
percentage of 6.3% against same period the previous year.
Even Inflation rate per August was
still at safe level, only 4.58% year-on-year. Downturn of competiveness level
by WEF also made all other achievements seemed flavorless. Such was perhaps the
things that made businesspeople of the national logistics sector feel uneasy.
It seemed reasonable that the
Association of Indonesian Logistics (ALI) pied the Government to increase
budget for infra-structure in the APBN State Budget by threefold to reduce
logistic cost.
Ali felt that to arrive at logistic
cost of 10% in 2025, the Government needed to increase allocation of infra
structure fund as per next year. The allocated budget for infra structure in
APBN at that time was about 2%, way below that of China who allocated fund of
around 6% for infra structure.
According to ALI, with additional
budget for infra-structure, infra structure development to support logistic
activities would also be made faster, so logistics cost could be automatically
reduced.
Previously, the Coordinating Minister
of Economy Hatta Rajasa disclosed the Government set target for national
logistics fund at 10% for 2025, lower than logistics cost today at 14.08%.
Today logistics cost in Indonesia was way higher compared to other countries in
Asia which was only around 4% - 10%. Therefore infra structure was one of the
Government’s priorities.
The national logistics system was
today still not efficient, the weak point was connectivity which needed to be
developed in order to strengthen competitiveness and improve people’s welfare.
Beside increasing allocation for infra-structure, the Government must also
withdraw subsidy for oil so the fund could be used for revitalizing
transportation armada as well as infra-structure development.
If the subsidy fund was transferred
for infrastructure development and revitalization of transpiration armada, it
would lower logistic cost in the long run. Human resources was one important
aspect to be observed. Indonesia needed personnel who were competent in
logistics management, but today trained personnel in logistics were still
scarce in Indonesia, which tend to stagnate the logistics operation itself.
Logistics companies frequently seek
for personnel from abroad since logistics managers of high quality was still
limited in number at home. Logistics personnel needed proper education and
training. To be exact, logistics personnel in Indonesia needed certification on
logistics so the quality would be well guaranteed whereby to bring progress for
logistics business in Indonesia.
About the target to set logistics
expenses to become 10% in 2025 as set by the Government, it was considered as
realistic enough to assume average annual inflation at 5%, the target was
sizable enough. It was still conservative but quite reasonable, because the
inflation factor must be considered as well. Provided that the pre-conditions
were met, the target would hopefully be met.
The instruments to support the
national logistics system in enhancing efficiency in economic activities in
economic activities in fact already existed, i.e. through the Masterplan
Program of Economic Acceleration and Expansion (MP3EI). The MP3EI program had
the logistics betterment as the main agenda.
To illustrate, the selling price of
lemon from China was cheaper than that from Pontianak, Indonesia because the
transportation cost (including logistics) was lower in China. The price of
cement in Papua was twentyfold of the price in Java due Transportation and
logistics factors.
Building of airport and seaport as
an effort to upgrade transportation system would bring the greatest benefit if
the logistics system were also developed. In this case the prioritized factor
was not the transportation armada like sophisticated aircrafts and ships, but
more on the available good and efficient logistics as supporting factors.
Improvement of the logistics system
must be on the hardware and software side which were vital and must therefore
be prioritized because Indonesia was way behind other neighboring countries
(peers group).
In ASEAN 5, including Indonesia, the
Philippine, Thailand, Singapore, Malaysia and Indonesia, in terms of logistics,
was most probably lowest by rank. It seemed reasonable to say that Indonesia’s
neighboring countries were more ready to face the worst of the chain effect of
crisis in Europe compared to four other ASEAN states as their infra structure
and logistics were more ready.
Business News - September 12, 2012
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