Connectivity Is the Key

Connectivity Is the Key

JAKARTA, Kompas – Inter-island trade in Indonesia integrated with local economic potentials must be worked on. The efforts are not only related with infrastructure improvement but also with local economy development and isolated area opening.

Indonesia for Global Justice (IGJ) Executive Director, M. Riza Damanik, on Tuesday (12/30) in Jakarta said inter-island connectivity is an important key to develop inter-island trade in Indonesia. The connectivity can improve the interaction of local economic activities from upstream to downstream.

“Therefore, sea highway lane must be able to solve three issues such as to open isolated areas, to improve upstream-downstream economic activities, and to boost new welfare hubs,” he said.

According to Reza, the improvement and enhancement of Sumatra-Java food logistic trading route through sea is needed. Moreover, non-commercial lanes must also be opened to boost economic activities in the isolated islands.

The islands whose trading activities are isolated are located in eastern Indonesia. Whereas, the area has overflowing fish resources but it is less supported with trade and proper fishery processing improvement.

“Fishery resources are located in eastern region but 70 percent of ports are in western region. Sixty-percent of Indonesian fishery processing industry is located in Java Island,” Riza said.

Every year, Tenau Port, Kupang, East Nusa Tenggara, is visited by the vessels from Java Island unloading up t0 3,000 containers. However, when they return to Java, the vessels only bring 900 loaded containers while the rest 2,100 containers are empty (Kompas, December 19th 2014).

Transportation Minister, Ignasius Jonan, used to say the government will boost the development of scheduled vessels in Indonesian waters. With the existence of those vessels, commodity price can be lowered. So far, eastern Indonesian region has few scheduled vessels.

Reform

PT Pelabuhan Indonesia (Pelindo) II CEO, RJ Lino, expected the government to immediately reform maritime logistic sector since Indonesia’s maritime sector is left far behind other countries in Southeast Asian region.

According to the data from World Shipping Council 2013, Tanjung Priok Port, Jakarta places 22nd under the ports in Singapore and Malaysia. Therefore, Pelindo II or IPC attempts to improve port infrastructure to support maritime reform and sea highway.

“One of the efforts we conduct is to add Tanjung Priok Port’s capacity. In 2009, port capacity was only 3.6 million TEUs. In 2015, it will be around 10 million TEUs,” Lino said.

Lino added IPC is currently constructing New Tanjung Priok Port and re-arranging the existing port model. The budget needed for all activities in 2015-2019 is USD 4 billion or IDR 500 trillion.

According to IPC data, stevedoring traffic in Tanjung Priok Port increses every year. Container traffic in 2012 was 5.83 million TEUs which increased to 5.89 million TEUs in 2013. The port can also serve the vessels having 4,000-TEU capacity.

The traffic realization of foreign trade in 2013 was 22.329 million tons and domestic trade was 36.098 million tons. Container traffic at conventional terminals in 2013 reached 2.343 million TEUs and at container terminals reached 273,607 TEUs.

So far, commodity and logistic transportation service contribute for deficit in Indonesia’s on-going transaction. The deficit is caused by great import and foreign transportation firm usage.

Along 2010, commodity transportation service recorded USD 4.847 billion deficit. The deficit increased to USD 7.453 billion in 2011 and USD 7.566 billion in 2012.

In QIII of 2014, commodity transportation service sees USD 1.66 billion. The deficit occurs since the export in commodity transportation is only USD 424 million while import is USD 2.084 billion. (Kompas)