“Our logistic costs 2-2.5 times of Singapore and Malaysia. We want to stand in equal footing with them,” Widodo said.
Currently, Indonesia ranked 53 in the World Bank’s latest logistics performance index, worse than neighboring Malaysia, Thailand and Singapore. Logistic and transportation cost of Indonesia, Widodo said, are still high, around 24 to 27 percent of gross domestic product.
He expects reducing the logistic and transportation costs will push down inflation rate, even lower from current rate of around 4 percent.
Finance Minister Bambang Brodjonegoro added, through BLC, companies could store their goods in joint warehouses for up to three years and can still receive tax incentives, compared with only one year for goods kept in a normal warehouse in a bonded zone. BLC will also free up some spaces at warehouses in congested ports and help efforts to speed up custom clearance, he added.
“Next year, we target to see 50 new centers and that in the next 2-3 years Indonesia could become a logistics hub for the region,” he stated.
As previously reported, the government has included the establishment of the logistics centers in its economic policy packages as a move to improve business climate and attract foreign investment.
President expects through this program, the dwelling time at seaports could be reduced significantly to around 3 days starting from April this year from 4.7 days at present, once the goods were stored at the logistic bonded zones.
To accommodate the program government has issued Government Regulation (PP) No. 85/2015 on bonded zone land area, Finance Ministry Regulation PMK No. 272/2015 on BLC and Directorate General on Customs No. 1/2/3 on Jan 29. (*)