Government: Indonesia Ranks 53rd in Ease of Doing Business

The government claims its efforts to improve the country’s rank in ease of doing business have been a success. In October last year, the World Bank released a report on an Ease of Doing Business, in which Indonesia ranked 109th of 189 countries in the world. The government claims that the country’s rank has since climbed to 53th.

Head of the Investment Coordinating Board (BKPM) Franky Sibarani said that based on an evaluation, the ease of doing business in Indonesia had shown a lot of progress. "Yesterday we used the Ease of Doing Business calculator, and we (Indonesia) now rank around 53th," he said after a 2016 government working meeting with the heads of regional governments at the State Palace on Friday (8/4). (Read: Government Releases Many Regulations on Ease of Doing Business)

The calculation made by the government is based on the 10 indicators used by the World Bank to measure ease of doing business. These indicators are starting a business, applying for building permit, getting electricity connection, registering property, obtaining loan, protecting investors, paying taxes, trading across borders, enforcing contracts, and closing a business.

Despite showing significant progress on the 10 indicators, Franky admitted that there is still a lot to do. President Joko Widodo expects the target of 40th position to be achieved by June. (Read: Applying for Right to Build PermitOnly Takes Two Days)

To achieve this target in the next three months, deregulation of rules hampering the ease of doing business is crucial. Once the rules are simplified, the government must make the public aware of the new rules and processes. They should also provide direction and make operational staff aware of the deregulation and the new systems. Finally, all relevant ministries and agencies need to perform monitoring and evaluation.

According to Franky, the government’s efforts to improve the rank of ease of doing business have received support and offers of cooperation from local governments, including the municipal government of Surabaya. In the ease of doing business index compiled by the World Bank, Jakarta and Surabaya were used as the two sample cities in Indonesia. (Read: Government Involves Two Local Governments to Achieve 40th Position in Ease of Doing Business)

Surabaya mayor Tri Rismaharini said that she had done a lot to improve the ease of doing business in her region. This included deregulating the many and varied rules on business licensing. However, Risma can only amend the rules under her authority. Changing rules at the national level is more difficult as revising ministerial regulations, government regulations, and laws take time.

Nevertheless, Risma has done what she can to simplify the licensing process. For example, in the past, an investor who wanted to apply for warehouse license had to first obtain a business licence and a company registration certificate. Now investors are able to apply and obtain the three licenses at once.

"We also use mobile apps. So permit applications can be made using gadgets, and the results are sent electronically. Investors can print the licence themselves. The permits are barcoded, so we can tell if they are fake," said Risma. (Read: Widodo: Ministers Should Not Sign Carelessly to Avoid Problematic Regulations