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Minister Of Trade: New Trade Regulation Can Reduce Logistic Cost Up To 46%
Tuesday, 26 Nov 2024
The Ministry of Trade has announced that the issuance of Minister of Trade Regulation Number 27 of 2024 concerning Inter-Island Trade (Permendag No. 27/2024) is expected to reduce logistics costs in Indonesia by up to 46%.
Trade Minister Budi Santoso emphasized the commitment to continually lower domestic logistics costs to ensure the smooth functioning of Indonesia's economy.
"We are striving to reduce logistics costs in Indonesia consistently. Essentially, our goal is to minimize domestic logistics expenses to facilitate a well-functioning economic ecosystem," Budi stated during the Socialization of Minister of Trade Regulation Number 27 of 2024 at the Mövenpick Hotel in Jakarta on Tuesday, November 26, 2024.
Furthermore, Budi pointed out that one of the significant challenges faced by micro, small, and medium enterprises (MSMEs) is the high cost of distribution. This situation adversely affects local products, making them less competitive compared to foreign goods.
"With this regulation, when MSMEs wish to distribute their products, they will not incur high costs, allowing them to compete with foreign products," he explained.
Therefore, through Permendag No. 27/2024, it is anticipated that logistics costs within the country can be reduced to a level of 46%. "We aim to achieve a reduction in logistics costs by up to 46%. With this regulation, we hope to realize this goal," he added.
Budi articulated that the purpose of this policy is to facilitate the Ministry of Trade in regulating goods and their distribution between islands, thereby reducing price disparities across various regions. This approach enables the government to identify areas experiencing surplus and deflation.
According to data from the Central Statistics Agency (BPS) in 2023, several logistical challenges persist, such as trade transactions that remain concentrated in Java and significant price disparities for essential goods between regions.
"This has significant implications for our distribution and inter-island logistics, making it easier and reducing distribution costs. Additionally, it helps prevent illegal imports, as all responsibilities can be tracked, allowing for better monitoring of goods movement between islands," he explained.
Furthermore, Budi noted that Regulation of the Minister of Trade No. 27/2024 is part of the Action Plan for Reforming Port Governance within the National Strategy for Corruption Prevention by the Corruption Eradication Commission (KPK) for the years 2023-2024, with plans for continuation into 2025.
It is important to mention that Regulation of the Minister of Trade No. 27/2024 was enacted on November 1, 2024, with the aim of narrowing price gaps between regions and preventing the entry and circulation of smuggled goods (illegal imports) within the country.
With the implementation of Regulation No. 27/2024, Regulation No. 92 of 2020 concerning Inter-Island Trade is revoked and declared null and void. This new regulation will take effect 90 days from the date of its enactment. (deriz@insightinnews.com)
