Conference - Session-2

Time: 15.15 – 17.00

EDY PUTRA IRAWADY,

Deputy Minister for Commerce and Industry,

Coordinating Ministry For Economic Affairs

Jakarta International Logistics Summit & Expo (JILSE)

Jakarta, October 19th 2016

3

Azas Cabotage

(UU.17/2008)

Azas Cabotage

(UU.17/2008)Rural

Rural

Rural

Rural

Rural

Rural

RuralRural

Rural

City

City

City

Inter Island

Inter Island

Inter Island

Indonesia

International

Hub Port

Europe

Asia

America

Africa

Australia &

Oceania

Local and National Network Integration Global Network Connection

VISION 2025: LOCALLY INTEGRATED, GLOBALLY CONNECTED FOR NATIONAL

COMPETITIVENESS AND SOCIAL WELFARE

BUILDING THE ECONOMIC CONNECTIVITY RURAL-CITY, AND GLOBAL MARKET

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Vision: Locally Integrated, Globally Connected for National Competitiveness and Social Welfare

BL

UE

PR

INT

“Presidential Regulation No.26/2012 on

the Blueprint of National Logistics System

Deverlopment, signed and entry into force on 5

March 2012” Paradigm : Ship follows the trade & Ship promotes the trade

KEY DRIVERS OF NATIONAL LOGISTICS SYSTEM

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Phase I (2011-2015)

Goal: lay a strong

foundation to establish

an effective and efficient

National Logistics

System in order to

achieve the locally

integrated vision and

create a strong basis for

being connected to

ASEAN logistics

networksAction: Regulatory

Revision, HR

Development and

Logistics

Infrastructure

Improvement in order

to create Local and

National Logistics

Integration

Phase II (2016-2020) Phase III (2021-2025)

Goal: strengthen domestic

logistics integration, and

synchronization,

coordination and integration

with ASEAN logistics

networks, and lay a strong

foundation to be integrated

with the global logistic

network to achieve the

Globally Connected vision

Action: Development and

expansion of logistics

infrastructure, capacity

building for actors and

providers of logistics

services to make the

national logistics system

connected to the ASEAN

logistics network

Goal: operate effective

and efficient national

logistics system

connected to the Global

logistics network

Action: Strengthening

of the National

Logistics System to

be connected to the

Global Logistics

network

•National Logistics Costs of

the 2015 GDP declines by 3%

from that of 2011

•Indonesian LPI Score is 3.1

•National Logistics Costs of the

2020 GDP declines by 4% from

that of 2015

•Indonesian LPI Score is 3.3

•National Logistics Costs of the

2025 GDP declines by 5% from

that of 2020

•Indonesian LPI Score is 3.5

SISLOGNAS: Action Plans

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MARITIME CONCEPTS IN BLUEPRINT OF SISLOGNAS

Pusat Distribusi Provinsi

Pusat Distribusi Nasional

Legend:

By sea / by rail By land / by rail / by seaBy sea / by rail / by land

Konektivitas:

Short Sea Shipping

Sea Transportation Network as the Backbone of National Logistics Transport

International Hub Port development in Kuala Tanjung and Bitung as the main gateway to Indonesia;

Short Sea Shipping as a national transport backbone for the transportation of goods and for shifting the burden of road;

Develop Logistics Center to support the development of Indonesian marine activities.6

INDONESIA’S LOGISTICS PERFORMANCE INDEX (LPI)-2016

COMPONENTYEAR

CHANGES2014 2016

AkumulasiRank 53 63 - 10

Score 3,08 2,98 - 0,10

CustomsRank 55 69 - 14

Score 2,87 2,69 - 0,18

InfrastructureRank 56 73 - 17

Score 2,92 2,65 - 0,27

International

Shipments

Rank 74 71 + 3

Score 2,87 2,9 + 0,03

Logistics Quality and

Competence

Rank 41 55 - 14

Score 3,21 3 - 0,21

Tracking and TracingRank 58 51 + 7

Score 3,11 3,19 + 0,08

TimelinessRank 50 62 - 12

Score 3,53 3,46 - 0,07

Indonesia’s LPI rank 2007-2016

43

7559

5363

2007 2010 2012 2014 2016 7

LPI is a picture of the logistics performance of some countries, based on survey results from perspective buyers, sellers and

businesses, conducted by the World Bank, which is published every two years.

The rank of LPI was compiled based on the scores of each country performance in, six component indicators, namely: (1) Custom; (2)

Infrastructure; (3) International Shipments; (4) Logistics quality and competence; (5) Tracking and tracing; dan (6) Timeliness.

• In 2016, Indonesia's LPI is ranked on 63 of 160

countries, decline 10 levels compared to 2014 (53). This

position is under other ASEAN countries, such as Singapore

(5), Thailand (45), Malaysia (32).

• The declining of Indonesia's ranking in 2016, it caused by

Indonesia's LPI score fell from 3.08 (2014) to 2.98

(2016), and the improvement of other countries scores such

as: India (35), China (27), Italy (21), Kenya (42), Oman

(48), Egypt (49), Brazil (55), Botswana (57), Tanzania

(61), Rwanda (62);

• The decline of Indonesia scores occurred in 4 component

indicators, namely: Customs, Infrastructure, Logistics

quality and competence, dan Timeliness; That only two

indicators increased, namely: International Shipments dan

Tracking and tracing.

• ASEAN countries that had decreased in scores, sequentially

are: Laos (-0.32), Vietnam and Thailand (0.17), Malaysia (-

0.16), Philippines (-0.14), and Indonesia (-0,10)

NATIONAL LOGISTICS COST 2004-2015 “PREDICTION” (% GDP)

Source: Pusat Pengkajian Logistik dan Rantai Pasok ITB

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The National Logistics Costs in 2013 was amounted to 25.15% of GDP, based on the prediction in 2015 was amounted around 23,62% of GDP.

IMBALANCE OF GDP BETWEEN THE WESTERN AND EASTERN REGION OF INDONESIA

81.24% of Indonesia's GDP is generated in Java and Sumatra, while 18.76%, in other regions

(Sulawesi, Bali, Nusa Tenggara, Papua and Maluku).

The size of Java and Sumatra island area is only 44.46% of the total area of Indonesia.

However, the population amounted to 82.22% of the total population of Indonesia, while the

eastern region amounted to only 17.78%.

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GDP 2014

BREAKTROUGH

DEREGULATION POLICY PACKAGE RELATED TO LOGISTICS SECTOR

BUILD ECONOMIC

CONNECTIVITY

VILLAGE-TOWN

PACKAGE I

Indonesian Single Risk Management

The application of a single identity and uniformity of information on

the importer-exporter business profile, as a basis of risk

management for issuing permits/licenses of respective ministries /

agencies

Improving the competitiveness of National

Aviation Industry by providing incentives in

the form of import duty of 0% to 21 tariff

lines of aircraft components.

PLB Facilitate the domestic industry to obtain the

raw materials smoothly, by making closer the supply

source onto the industrial area.

Single Identity Importir

Import Identification Number (API) is the single identity of

the importers

Import facilities:

Providing the facilities Free of VAT for imports of

transport and its spareparts, covers transport in the

water, under water, in the air, rail, various types of

ships, aircraft, and railway

Reduction Cost of Port

Exempt from VAT for national shipping companies and

vessels operated by foreign shipping companies, which

carry out transport activities abroad, that not carrying

passengers / goods between ports in Indonesia.

Development of Post Commercial Service Business

Determination of the amount of commercial postal service

rates no higher than the universal postal service rates set

by the government

The unification of Payment Services Electronic Ports

(Single Billing)

Affirmation of the implementation of SOE Minister

Regulation No. 2 of 2013 on Guidelines for Developing

Management Information Technology in SOE.

.

Synergy of state-owned companies to establish an

aggregator / consolidator for export of SME products

The integration of Inaportnet system into the National

Single Window system.

Use of Rupiah currency for the bussiness

transactions of transport activity

PACKAGE IX

PACKAGE XI

PACKAGE VIII

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WHATSHOULD WE

DO?

“... Our logistics cost and our transportation costs are still very high.Transportation costs in Indonesia can reach 24-27 percent of the totalproduction costs. It is still very high...So it is expected that logistics costs will be lower because we do not have totransport goods from other countries that needs costs. Why should we take

raw materials for production in another country? I hope we will stop this. Wehave to move logistics centers to our country. (Jokowi , in inaugurated a

bounded logistics center, Cakung, March 10th 2016. Source: setkab.go.id)

“... Two years from now in March, I will inaugurate

them. They must not be delayed!” (Jokowi during a

groundbreaking ceremony at Kuala Tanjung Port, January 27th 2015. Source: thejakartapost.com)

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STRONG COMMITMENT FROM PRESIDENT R.I

TO IMPROVE THE PERFORMANCE OF NATIONAL LOGISTICS

ACCELERATING THE DEVELOPMENT OF NATIONAL LOGISTICS

Targets:• Establishment of an integrated logistics

system, effective, and efficient• Establishment of Economic

Connectivity from rural-urban, and to global market

• Publishing the Economic Policy Packageof the Specific Logistics Sector

Objectives:• Lowering the national logistics costs• Lowering the cost of production (CoP)• Increasing exports

Key commodities

Logistics Infrastructure Development

Logistics Service Providers and Players

Human Resources Development(HRD)

Information, Communicationand Technology

Harmonitation of Regulation and Policy 14

Logistics reform will focus on six Key Drivers of the National Logistics System (Sislognas), which includes:

Kementerian Koordinator Bidang Perekonomian

Republik Indonesiawww.ekon.go.id

2015

...Bangunlah jiwanya, bangunlah badannya untuk Indonesia Raya....

[W.R Supratman]