Source: The Star

Date: 21 March 2021

JAKARTA, March 21 (Xinhua): Indonesia now has a new Batam Logistics Ecosystem (BLE) which offers a better business climate including efficient services and permits to make the country more competitive with the integrated logistics management platform.

The BLE is a form of collaboration and synergy among relevant ministries, institutions, local governments, and the private sector in building a better logistics ecosystem.

The Indonesian logistics management was so far relatively inefficient compared to those in neighboring countries, therefore the BLE was designed as part of the National Logistics Ecosystem (NLE), Coordinating Minister of Maritime and Investment Affairs Luhut Binsar Pandjaitan said when inaugurating the BLE in Batam, Riau Islands province, on Thursday.

With the NLE which functions to simplify business processes through an integrated inspection with single submissions of port services and permits, the Indonesian government is targeting to reduce logistics costs to 17 per cent of the gross domestic product (GDP) by 2024.

Pandjaitan added that the BLE is the Indonesian government's effort to make the country logistics ecosystem more efficient so that it can compete globally.

"Logistics costs in Indonesia currently reach 23.5 per cent of the Gross Domestic Product (GDP). Meanwhile Malaysia's logistics costs are only around 13 percent of its GDP," the senior minister said.

With a difference of about 10 percent, he said, investors would certainly think twice about entering and investing in Indonesia, and therefore, the government continues to make efforts to reduce logistics costs.

Pandjaitan said he wanted that eight major ports in Indonesia also to be included in the National Logistic Ecosystem following the launch of the Batam Logistics Ecosystem.

Among the major ports are Tanjung Priok port in Jakarta, Patimban port in West Java, Tanjung Emas port in Central Java, Tanjung Perak port in East Java, Makassar port in South Sulawesi, and Belawan port in North Sumatra.

The Ministry of Trade supports the Batam Logistic Ecosystem implementation to increase the efficiency of trading activities related to Batam. (Photo by Ministry of Trade Republic of Indonesia)

Meanwhile, Minister of Finance Sri Mulyani Indrawati said the implementation of the Batam Logistic Ecosystem is one of the government's efforts to be able to recover the economy from the COVID-19 pandemic crisis.

"So this is part of efforts to accelerate the economic recovery," the minister told a press conference on the launch of the Batam Logistic Ecosystem on Thursday.

Indrawati stated that this economic recovery could be realized because the BLE would increase competitiveness, provide business certainty, and attract investment in Batam whose economic growth in the last five years has been below the national economic average, even though this region has enormous potentials.

"In a year with the current declining economic activity, we need to increase exports and imports so that later when the economy recovers, it (Batam) can provide much better services," she said.

The implementation of the BLE is also a concrete step from the mandate of the Job Creation Law, namely improving the business environment and creating jobs, she said, adding that this is part of reducing inefficient regulations so that it is easier to provide certainty.

Among the services that can be utilized in the current BLE are services of ship and truck ordering, floating storage unit and auto-gate system besides the payment process, she noted, citing that the BLE was expected to grow and develop in the future by adding new services such as warehouses and depots.

She pointed out that the collaboration on the BLE among the relevant institutions in the country is also carried out in an effort to curb smuggling in the Malacca Strait, the country's East Coast and Batam.

The measure is in line with the National Strategy for Prevention of Corruption which is coordinated by the Corruption Eradication Commission and all relevant law enforcement offices in areas prone to smuggling because they are close to neighbouring countries, she said.

The Trade Ministry supports the arrangement of the logistics system through the Batam Logistic Ecosystem, which was expected to create efficiency in trade activities through the integration of licensing and logistics services.

"The Trade Ministry supports the implementation of the Batam Logistic Ecosystem as it can cut logistics costs and time through integrated services," Trade Minister Muhammad Lutfi said in an official statement on Thursday. - Xinhua