The Jakarta Post
The most important measure of the eighth reform package launched on Monday, though its effect may not be felt for two or three years, is its one-map policy that will harmonize all maps on land use and spatial planning, thereby making land ownership more transparent and reducing the risk of conflict.
A comprehensive, transparent and centralized map on land use and ownership will provide clarity on the boundaries of land owned by companies, communities and the government. The absence of such a comprehensive and transparent map has been one of the main reasons for difficulties in pinpointing the source of the forest fires that have been hitting the country every year. It's no wonder very few plantation companies have been brought to justice so far even though a massive wave of fires takes place annually in Sumatra and Kalimantan.
Environmental observers often allege that the government is reluctant to make existing concession maps public, leaving it almost impossible to identify which plantations are responsible for the annual bout of forest fires during the dry season.
The one-map policy will support the land titling policy, launched a few weeks ago as part of the seventh reform package. This measure is designed to accelerate land title registration to enable farmers and micro and small enterprises to use their land, as collateral for bank loans and to develop an electronic land registration system.
The experiences of many developing countries, especially those in Latin America, has shown that titling land makes it easier to trade the land, as property rights are more clearly established. Most farmers have not yet registered their land as private property. One immediate benefit for farmers is that when a piece of land gets a registered title, its price can immediately rise more than tenfold.
The other major components of the eighth reform package are: incentives for the development of oil refineries, as we now import almost 65 percent of our crude oil and refined oil products and the streamlining of import procedures for airplane components and spare parts to encourage the development of airplane maintenance services in the world's largest archipelago.
The airline industry has been growing rapidly with a steady increase in the number of airplanes imported, but most maintenance services are still done overseas.
Since September, the government has launched eight reform packages to improve the business climate, reinvigorate investment, enhance job creation, facilitate domestic and international trade and strengthen the purchasing power of low-income people through significant cuts to their income tax.
Included in the earlier reform packages were the simplification of regulatory procedures for various business permits, the introduction of a fixed formula for determining minimum wages, thereby improving industrial relations, tax incentives and easier licensing for companies operating in special economic zones.
This artillery of reform measures is expected to boost economic growth next year to at least 5.3 percent, compared to an estimated 4.9 percent this year, as the economy becomes more efficient and competitive.