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Flows of Goods and Services
The cost of moving goods across international borders is now as important as tariffs in determining the cost of landed goods. The ability of countries to allow delivery of goods and services quickly and at a low cost is a key determinant of their participation in the global economy. Easier movement of goods and services clearly drives export competitiveness and foreign direct investment. Delays in border formalities can raise the cost of goods and hurt a country’s competitiveness with its trading rivals. Also, a reputation for inefficient and ineffective Customs and international logistical regimes will discourage international companies from doing business in a country.
Indonesia’s government is mindful of the importance of effective trade facilitation, exhibiting a refreshed commitment through the development of a new Customs law and through a very effective new leader in the Customs department. But whether a new Customs law will be properly implemented remains to be seen, and corruption at the border continues to undermine Customs reform. A wide variety of challenges face importers and exporters, transporters, brokers, and other members of Indonesia’s trade community.
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