Subject: JP: Cross-border direct trade await legislation

The Jakarta Post June 10, 2002

Cross-border direct trade await legislation

Indonesian migrants, who used to dominate roadside small-scale businesses, have gone, never to return.

But the tragic parting does not mean the end of the world for the two neighbors as far as trade is concerned. East Timor can afford to lose the Indonesian traders but not their commodities.

So, even though East Timorese traders have taken control over the local economy, they still offer the same thing: Indonesian-made goods and commodities.

Noodles, cigarettes, soap, toothpaste, wheat flower, rice, bottled water, seasoning, textiles - just name it - are mostly imported from Indonesia.

The commodities remain popular in East Timor because they are cheap, of good quality and suit the locals' palate, probably because they have been all too familiar to them after 24 years of "integration" with Indonesia.

They are unbeatable compared to commodities imported from, let's say, other countries such as Australia, which also re-exports Indonesian commodities.

Goods imported from the West are usually available at supermarkets catering to the free-spending international staff and the wealthy locals. One of the best-known upscale shops is Hello Mister near the presidential palace.

Taibesi traditional market in South Dili is no different from markets in Indonesia in terms of merchandise on offer.

"We locals have become very familiar with Indonesian goods and are lucky that their supply is stable, even after all this turbulence," said Maria Soares, a textile trader in Taibesi.

She was talking about direct trade between East Timorese and Indonesian businesses since East Timor's independence.

The spacious marketplace with gorgeous hills in the background was built in 2001 on a former Indonesian army barracks. Remnants of the military training facilities and a monument featuring scrapped weapons are kept in place.

Traders obtain merchandise from wholesalers in Dili, who have imported the goods from Surabaya and the Indonesian western half of Timor island.

But not all commodities are exported by big companies. Many small-scale businesses and even individual Indonesian entrepreneurs have been doing direct trade with East Timor.

Slamet is a textile businessman from Surakarta who does cross-border business. He says the immigration procedure is "easy".

After his truck from the West Timor border town of Atambua has passed the immigration and border security check, he pays import duty, which is 14 percent of the total estimated value of the goods on board.

"The method of payment is negotiable. If we don't have cash, we can still go but we will have our passports withheld to be collected when go back to Atambua and pay the duty," he said.

Even though people in the two countries have been yearning for direct trade, legislation has yet to be drawn. The East Timorese government is particularly keen on it but the Indonesian government is showing less interest.

Just recently, East Timor officiated the border market in Turiskai. The market takes place in the river that partitions the two countries and is only open three days a week.

Bria Yohanes, deputy regent of Belu, which shares a border with East Timor, says the regency is drawing up regulations on direct trade in his area of jurisdiction.

The regency has designated three places, Motemasin, Kalitono and Motaen, as the cross-border market.

In the future, Bria says, the markets will open any time as long as there are people with to do business. "We want to make prices as low as possible to kill the black market," he said. "One thing we are pondering is to exempt vehicles transporting goods from paying tax to lower transport expenses."

East Nusa Tenggara officials have been pinning high hopes for transborder trade, which it expects will increase locally-generated revenues.

They have proposed that East Nusa Tenggara is made an authority area like Batam Island, which will allow it greater power to manage local resources.

The demand received strong support from leaders of the Catholic Democrats Party (PKD), which has its strongest base in the province. They propose an economic triangle linking Kupang with Dili and Darwin.

The idea is to help economically empower impoverished East Nusa Tenggara.

"If East Timor becomes more prosperous," PKD chief Stefanus Roy Rening says, "it could become dangerous because it could sow the seeds of separatism (in East Nusa Tenggara)."

The people of East and West Timor basically share the same ethnic background.

"The central government should soon issue a regulation on cross-border trade," Roy said. "People on both sides of the border are waiting, anxiously."

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