“There’s obviously plenty of room for greater growth in Indonesia, if it can be supported by more foreign direct investment. The economy is relatively stable and there has been no major disruption to business. Overall the outlook for Indonesia over the medium to long term remains positive,” said Jakob Frils Sorensen, president director, Maersk Line Indonesia.
Infrastructure development remains the key to the country’s continued growth. Plans are underfoot to build a new integrated port and industrial estate in Surabaya as well as a new container port in Jakarta to help ease the congestion at Tanjung Priok, Indonesia’s main port.
“The new port will enable shipping lines to do direct calls at Jakarta, so customers in Indonesia can benefit from faster transit times and reduced logistics costs. This however needs to be supported by better inter-coastal connectivity so Jakarta can act as a main transshipment port, and offer more competitive costs to shipping lines,” Sorensen said.
“With better infrastructure you will see more investments. The cycle needs to be reignited and the Indonesian government can focus on this to drive future trade growth.”
While exports of manufactured goods are expected to rise, there are concerns about a fall in imports of capital goods into Indonesia. A weaker rupiah and infrastructure bottlenecks, especially at the country’s main ports, are the main reasons for the expected decline in import of capital goods.
Domestic businesses have also put expansion plans on hold as the country awaits the outcome of the 9 July direct presidential elections. Sorensen noted that imports of waste commodity, wood pulp, foodstuffs and autoparts have declined by 15% year-on-year.
To increase its network and coverage in Indonesia, Maersk Line will offer a direct service from Bitung port in North Sulawesi to Tanjung Pelepas in Malaysia. This will considerably reduce the transit time by an average of 5-7 days to reach major markets like Europe and the US.
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