Monday, April 18, 2005

Quality OK, Delivery No

Last week Faisal Basri and I joined a team visiting four export-oriented factories. It seems to me that our low competitiveness is not due to bad quality, nor it is on technology. It is because inefficiency in delivery. Among all, the most problematic culprit is transportation infrastructure. The trucks with containers from these factories have to waste several hours every day dealing with traffic jam and long queues in toll way gates and port gate. Once they enter the port, they have to fill in several documents, many of which are not required by laws, but by "convention". In addition, the corporate income tax return takes so long a time it hinders the cash flows of those firms.

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