Mustaqim Adamrah, Jakarta – Local entrepreneurs are skeptical about the "abundant" business opportunities in the capital, citing that many sectors are untapped but marketing and licensing obstacles remain, the trade chamber chairman says.
The chairman of the Chamber of Commerce and Industry's Jakarta chapter, Sofian Pane, said Thursday the trade sector in the capital was lucrative but businesspeople often came up against problems in obtaining business licenses and product distribution.
"Jakarta is at the core of trading. It has great potential, with export and import transactions in the capital accounting for around 60-70 percent of exchanges," Sofian said on the sidelines of a discussion on business opportunities in the archipelago's regions. "However, businesses spend so much time on product deliveries alone because of, for example, traffic congestion in Jakarta. This has resulted in high costs."
Spending on product transportation, he said, ranged from 22-32 percent of a product's market price. "The capital's reliance on other regions, which supply 98 percent of its needs, is also a cause of the high cost," Sofian said.
By comparison, the spending on transportation only contributes around 10-15 percent of the market price of a product both in Malaysia and Vietnam, while the figure is lower in the city-state of Singapore, he said. "There must be something wrong if Jakartan businesses spend much more than neighboring countries."
He said costs also increased if consignments were held at ports for document processing for more than a month, despite Finance Minister Sri Mulyani Indrawati's order to excise and duty services to shorten the period to between a week and a month, depending on the category of the goods.
High spending, Sofian said, also meant that the products Jakartan businesspeople sold overseas were less competitive than those of rival countries, causing a dilemma "as to which countries' businesses should export their products".
In addition to high distribution costs, he said, difficulties in getting licenses were also encountered by businesses in the capital.
The city administration is establishing one-roof services that will allow businesses to acquire the licenses they need within 60 days, from the former 151 days, following a 2006 ministry regulation on the services.
The system will provide, among other things, permission to use sites, licenses to build structures, company legal documents, business licenses and a company registration code. "Yes, the administration has such a plan. But we still don't know when the system will fully run," said Sofian.
The administration has just begun operating a building in Tanah Abang, Central Jakarta, that uses the system. It plans to build two more in the future, while awaiting a gubernatorial regulation on the comprehensive use of the one-roof services.
Regions like Sragen, Kebumen – both in Central Java – and Batam in Riau Islands have already established such a system, which has helped boost their local revenues.
According to the Jakarta Investment Coordinating Board's data, realized national investment in the capital reached Rp 14.9 trillion (US$140 billion) as of April this year, 14.47 percent of the planned Rp 102.94 trillion for this year alone.