Yogyakarta was ranked Indonesia's most investor-friendly city in 2010 thanks to its licensing reforms, says a World Bank (WB) offical.
The city's effective "one-stop service" system has simplified licensing for investors, said Sandra Pranoto, an official of Climate Advisory Services of the World Bank Group's International Finance Corporation (IFC).
"This is evident in *the IFC's* Doing Business in Indonesia 2010 report," Sandra told The Jakarta Post recently on the sidelines of a documentary film production depicting Yogyakarta's licensing reforms.
The report is based on a 2009 IFC survey that ranked cities on several factors, including ease in starting a business, obtaining construction permits and registering property.
Yogyakarta was ranked first of 14 cities for ease in starting a business and in obtaining construction permits.
Bandung, West Java, was ranked first for property registration.
The other cities surveyed included Balikpapan in East Kalimantan; Denpasar in Bali; Jakarta; and Surabaya, East Java.
"Reforms made a significant difference in the process that businesspeople must go through when starting a business or obtaining construction permits in Yogyakarta and elsewhere," Sandra said.
Yogyakarta, however, provides service better, faster and simpler, she said.
The survey's methodology was similar to another World Bank survey of 299 other cities in 41 countries, and so Yogyakarta could be compared directly to those cities, she added.
Yogyakarta's success stems from its city licensing agency, which is a one-stop service system that was developed by Yogyakarta Mayor Herry Zudianto and his team, she said.
Yogyakarta's Licensing Agency is the first municipal licensing office in Indonesia and remains one of only two such agencies in the country.
The agency was established in October 2005 and started full operation in January 2006.
Other licensing agencies in Indonesia were established by regional governments.
Previously, the city processed license requests through a one-stop service unit that resembled a counter more than a licensing office, said Yogyakarta Licensing Agency head Heri Karyawan.
The old unit had to forward license or permit requests to related agencies for more processing before the mayor could review the requests, Heri said.
"You can imagine how long it could take before a license application would be approved," Heri said.
The process is shorter and simpler because the Licensing Agency head now approves all requests, and not the mayor.
People who want to start a business or get a permit to construct a building in Yogyakarta can go directly to the Licensing Agency, Heri added.
In some cases people did not even to go to the city for licenses as some authority had been relegated to districts, he added.
Investments have increased in the region because of the simpler and faster licensing procedure and a special incentive offered by the city administration, Heri said.
For example, six new star-rated hotels started construction in Yogyakarta in 2010.
"Yogyakarta is a tourist destination, so hotels and restaurants are the most popular businesses."
The licensing agency receives 100-150 proposals for 29 different licenses each day, including business, construction, transportation and research requests.
"Previously there were 38 kinds of licenses, but we have simplified the number. Some licenses were erased to eliminate duplication."
"Under our old paradigm, licensing was perceived as something extremely difficult, complicated, expensive, time-consuming and uncertain," Yogyakarta Mayor Herry Zudianto said.
"We want to simplify legal aspects, fees and time. We want to change people's perceptions. We want people to know that dealing with permits in Yogyakarta is easy and simple," he added.
