Jakarta, Indonesia, December 15, 2009
—An IFC and World Bank report analyzing business regulation in Indonesia finds some good regulatory practices that compare well internationally. But the report also finds wide variation in local business regulation across the country.
Doing Business in Indonesia 2010
studies business regulation from the perspective of a small to midsize domestic firm. The report covers 14 cities: Balikpapan, Banda Aceh, Bandung, Denpasar, Jakarta, Makassar, Manado, Palangka Raya, Palembang, Pekanbaru, Semarang, Surabaya, Surakarta, and Yogyakarta.
The study covers three regulatory areas—starting a business, dealing with construction permits, and registering property. Starting a business and dealing with construction permits are easiest in Yogyakarta. Registering property is easiest in Bandung—and most difficult in Balikpapan. Start-up procedures are most cumbersome in Manado. Obtaining construction permits is most difficult in Surabaya.
“Decentralization allowed some local governments to introduce innovative service delivery mechanisms such as one-stop shops,” said E.E. Mangindaan, State Minister for Administrative Reforms. “When compared to other countries, Indonesia has a number of good practices. But these practices are not used everywhere. Different local government requirements and practices and the different performances of local branches of national agencies drive this variation.”
The report finds that if Semarang followed Yogyakarta in consolidating all local licensing at a one-stop shop, it could speed up business entry by three weeks. In Manado, thanks to the efficiency of the local National Land Agency office (
Badan Pertanahan Nasional
,
BPN
), transferring a property title takes the same time as in the United States. Effective coordination between zoning and building authorities puts Yogyakarta in the top 10 globally on the number of procedures for dealing with construction permits
“Going forward, IFC is keen to support reform-minded governments around the country in implementing reforms that will accelerate private sector development, create more jobs, and alleviate poverty,” said Adam Sack, IFC Country Manager for Indonesia.
The
Doing Business in Indonesia 2010
project
is endorsed by the government of Indonesia through the State Ministry for Administrative Reforms. The report is produced in partnership with the Regional Autonomy Watch (
Komite Pemantauan Pelaksanaan Otonomi Daerah
,
KPPOD
) and with support from the governments of Australia, the Netherlands, New Zealand, and Switzerland, and IFC Advisory Services.
About the World Bank Group
The World Bank Group is one of the world's largest sources of funding and knowledge for developing countries. It comprises five closely associated institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). Each institution plays a distinct role in the mission to fight poverty and improve living standards for people in the developing world. IBRD and IFC are currently seeking capital increases to strengthen their ability to fight poverty and advance development in the aftermath of the global economic crisis. For more information, please visit
www.worldbank.org
,
www.miga.org
, and
www.ifc.org
.
