Deregulation (simplification of the number and types of rules) and reducing bureaucracy (increasing efficiency of business processes) as included in the 12th set of Governmental policies, launched by President Joko Widodo in mid-2016, led to encouraging achievements. In 2017, Indonesia was ranked 91st in terms of ease of doing business (EODB), representing an improvement from a ranking of 106th the previous year rank (2016). Indonesia is listed as a top reformer among 190 countries. President Joko Widodo has set an EODB target ranking of 30th place for 2018, requiring extra effort to achieve this target.

Robert Endi Jaweng (Executive Director of KPPOD) stated this is encouraging, in that targets can be used to encourage progress to reach EODB target in 2018.

However, although there has been an overall increase in the Ease of Doing Business (from 106th place in 2016 to 91st place in 2017), if we look at specific indicators there has not been a significant advancement in the EODB performance. The Indonesian ranking for “starting a business” indicator as a determined by the number of small-scale business start-ups fell from 151th place in 2016 to 167th place in 2017. While the “property registration” indicator, moved from 118th place in 2016 to 123rd place in 2017. Looking at these indicators in particular, it would seem that there is a long way to go.

Looking at other indicators, the average number of procedures to open a business did not achieve the desired target. In 10 major cities, it was found that the number of procedures needed to open a business was 9.6 procedures although the target had been set at 7 procedures, and the length of time needed to open a business was on average 17 days although the target had been set at 10 days.

Secondly, at this time no less than 204 regulations have been revised (deleting, combining, simplifying and delegating regulations). But the level of intervention is limited to the regulations within the authority of the executive branch of government.

Third, communication of policies has not flowed smoothly from the central government to regional governments or from local governments to entrepreneurs. Different perceptions or lack of information, about the policies have led to slower responses in 10 major business centers (especially in the outer islands).

Nevertheless, governmental successes in deregulation can send an important signal to the market that the government is serious about the work ahead.

Source : Kompas, June 15th, 2017. “Ease of Doing Bussiness Package” by Robert NA Endi Jaweng.


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