World Bank's Report : Regulatory reforms make doing business in Indonesia easier
A recent report by the World Bank revealed that doing business in Indonesia has become easier, especially after the government implemented an online system in several licensing sectors.
The report, entitled Doing Business 2016: Measuring Regulatory Quality and Efficiency, ranked Indonesia at 109, an 11-place jump from last year’s 120, out of 189 countries assessed by the Washington-based global financial institution around the globe.
The report said that Indonesia had simplified licensing and registration of taxes and social security.
“Indonesia made paying taxes easier and less costly for companies by introducing an online system for paying social security contributions and by reducing both the rate and the ceiling for the contributions paid by employers,” the report read.
Other improvements noted in the report were the reduced time needed to register workers with the Manpower Ministry and the improved access to loans through enabling searches of the collateral registry with the debtor’s name, it added.
The report also put Southeast Asia’s largest economy among 24 countries that implemented regulatory reforms making it easier to do business according to three or more of the study’s 10 indicators, along with China, Hong Kong, Russia and Vietnam, among other countries.
Despite Indonesia’s improvement, it still lagged far behind its peers in Southeast Asia, like Singapore (first), Malaysia (18th), Thailand (49th), Vietnam (90th) and the Philippines (103rd), the report said
Of 10 indicators used in the survey, Indonesia has shown improvements in five of them, include in dealing with construction permits (up 46 places) and getting electricity (up 32 places).
The country still faces shortcomings in several others, such as in registering property (down 14 places), starting a business (down 18 places) and trading across borders (down 43 places).
The deputy director for investment planning of the Investment Coordinating Board (BKPM), TambaHutapea, said on Wednesday that his office would discuss with the Finance Ministry and the customs office the measures needed to improve procedures and lower export and import costs.
“The government now focuses on continuing the deregulation and de-bureaucratization reforms by working intensively and disseminating the policies with the related ministries and local administrations,” he told the press.
BKPM’s investment deregulation director Yuliot expressed hope that more cities would be included in the survey in the future.
“Some other cities have far better services than Jakarta and Surabaya, which were surveyed by the study,” he said, adding that a subnational survey carried out by Regional Autonomy Watch (KPPOD) in 20 cities nationwide in 2013 revealed that Yogyakarta and Balikpapan in East Kalimantan topped the investor-friendly cities list.
A study carried out by the Asian Development Bank (ADB) and KPPOD in five business cities in 2014 showed that Jakarta and Surabaya were among the worst at handling business licensing applications, ranking lower than Makassar in South Sulawesi, Balikpapan and Medan in North Sumatra.
KPPOD executive director Robert EndiJaweng said that Jakarta had shown improvements in business licensing this year.
“Meanwhile, we need to keep an eye on Surabaya,” he said, adding that as long as the city did not start reforms by, such as, establishing a one-stop integrated service (PTSP) for handling licenses, it would be difficult to improve Indonesia’s rank. (prm/fsu)