Jakarta, April 9, 2008—
IFC, a member of the World Bank Group, and the provincial government of Jakarta today signed a memorandum of understanding to improve the province’s investment climate by streamlining business registration and licensing procedures. IFC and the provincial government will work together on a two-year project that aims to reduce the steps, time, and cost for business registration and licensing.
Improving the investment climate is a top priority for the province. “Jakarta is the main entry point for investments coming into Indonesia. In 2007, it surpassed other cities in attracting foreign investors, with investments totaling $4.7 billion for 365 projects,” said Sukri Bey, Head of the Jakarta Investment Board. “To reinforce Jakarta’s competitiveness, we are working toward developing an integrated licensing service that will make processes faster and more transparent and consistent.
The project will identify problem areas in business registration and licensing and develop solutions for a simplified process. It will also focus on improving human capacity and information technology, while consulting with private sector representatives to ensure that the solutions are effective and long-lasting.
Hans Shrader, IFC Program Manager for the Business Enabling Environment in Indonesia, said, “Our projects in Denpasar, Tabanan, and Tulungagung have achieved positive results, reducing the number of steps for obtaining a license by 35 percent, the time involved by 60 percent, and the costs to businesses by 75 percent. We are eager to replicate these successes in Jakarta.”
Adam Sack, IFC Country Manager for Indonesia, acknowledged the importance of business environment reform. He said, ““Making it easier to run a business in Jakarta will make a positive contribution to the city’s economy, and will also offer a powerful model to other municipalities across the country.”
Based on the
Doing Business 2008
report published by the World Bank Group, Indonesia ranks 123 out of 178 economies on the overall ease of doing business. The report also states that Indonesia is one of the most bureaucratic countries in East Asia, ranking well below Malaysia, Thailand, and Vietnam with respect to starting a business and dealing with licenses.
About IFC
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s vision is that people should have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through syndications and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit
www.ifc.org
.
IFC Advisory Services in Indonesia is a multidonor initiative and has offices in Aceh, Denpasar, Jakarta, and Makassar. Its mandate is to improve the business enabling environment, increase access to financial services, and improve the performance of selected supply chains. IFC has also engaged in business registration and licensing simplification in partnership with the governments of Australia, Canada, Japan, the Netherlands, Switzerland, as well as the Asian Development Bank.
