Kalla: Logistics Cost-to-GDP Ratio will Shrink in 5 Years

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  • Biaya Logistik Tinggi, Daya Saing Lemah

    Biaya Logistik Tinggi, Daya Saing Lemah

    TEMPO.CO, Jakarta - The government is confident that the logistics cost to GDP expense ratio could shrink to below 15 percent in the next five years.

    Vice President Jusuf Kalla said the government will see to it that the ratio will go down from 2014's 23 percent.

    The ratio will be crunched to "as low as possible," the vice president said during the sidelines of his visit to the New Port project are in Tanjung Priok, North Jakarta, Monday June 1.

    According to Kalla, Indonesia has noted soaring logistics costs following the high costs of transports and high interest loans for businesses. The solution, he said, is to build a number of transportation infrastructure such as ports, railways, airports, and roads.

    Earlier, the Indonesian Logistics and Forwarders Association (ALFI) said that the logistics sector will face severe challenges in the upcoming ASEAN Economic Community (AEC) by 2015 due to Indonesia's very high logistics transport costs.

    This is evident in the national logistics costs-to-GDP ratio which stands at 23.6 percent, far above other Asian countries like South Korea's 16.3 percent and Japan's 10.6 percent. Meanwhile, economic giant United States has a logistics cost-to-GDP ratio of just 9.9 percent.