Indonesia's Customs Authority Under Pressure to Reform

Minister's Ultimatum Sparks Immediate Response

Indonesia's Finance Minister, Purbaya Yudhi Sadewa, has given the Customs Authority one year to significantly improve its performance, warning that failure to comply could result in the institution being frozen. In response, Director General Djaka Budi Utama expressed strong optimism about meeting the deadline, stating that not doing so would lead to severe consequences including potential layoffs.

Historical Context and Potential Consequences

The Customs Authority has faced challenges in the past, including a previous freeze during President Soeharto's era from 1985 to 1995. During that period, many customs functions were outsourced to a private Swiss company, Société Générale de Surveillance (SGS), through its local partner PT Surveyor Indonesia. This historical context adds weight to the current ministerial ultimatum and underscores the urgency of the required reforms.

Path Forward and Stakeholder Implications

The successful implementation of these reforms will be critical not only for the Customs Authority's survival but also for maintaining employment and operational continuity. Djaka emphasized the determination to avoid a scenario where employees would be left 'makan gaji buta' (receiving salaries without working). The next year will be crucial in determining the future of Indonesia's customs operations and potentially reshaping the country's trade facilitation landscape.