W

ith more than 500 regencies and cities in 34 provinces across the archipelago, Indonesia often faces difficulties in synchronizing central government policies with those of regional administrations, a situation that is now hampering the country’s deregulation efforts.

Since launching its first economic policy package in September 2015, the government has made cutting red tape and solving investment bottlenecks its main priorities to improve the country’s business climate and competitiveness.

It has also scrapped 3,000 regional regulations (Perda) that made it difficult for businesses to become established and to operate. The reality in the field, however, is far from ideal as the government and regional administrations do not seem to be on the same page.

In Kupang, East Nusa Tenggara, the administration said it was aware of the deregulation attempts, but admitted it had not fully implemented the measures contained in the packages, which total 13.

Kupang Mayor Jonas Salean said he did not know for sure which licenses or permits now belonged to the central government and which were under the administration’s authority.

“We haven’t received such information, though it is essential to prevent overlapping authority,” he told The Jakarta Post on Thursday.

East Nusa Tenggara still lags behind other regions in the western part of the country, as shown by data from the Investment Coordinating Board (BKPM).

The amount of investment realized in East Nusa Tenggara stood at Rp 504.41 billion (US$38.83 million) in the first half of the year, far below that of West Sumatra, Riau or Jakarta.

Jonas, however, said the province had introduced an online system for businesses to acquire building permits (IMB), in a process that took only a day.

Coordinating Economic Ministry secretary Lukita Dinarsyah Tuwo said many of the decisions made by the central government, ministries and agencies apparently lacked force.

He said the ministry planned to visit several regions to familiarize them with the policy packages. “We will go and visit the administrations, but we have not set up any dates yet.”

IMB and Environmental Impact Analysis (Amdal) are among the permits that are reportedly hard to obtain due to different perspectives between the government and administrations, Lukita said.

BKPM deputy director for investment monitoring and implementation Azhar Lubis admitted that although the board had established several regional offices, more work needed to be done, including providing transparency and certainty in terms of documents, time and costs.

Meanwhile, businesspeople have lauded some administrations for gradually simplifying their licensing procedures, but claim that others remain reluctant to do so.

“Some administrations think reduced licenses will translate into reduced income. The problem is there are no consequences for administrations that don’t carry out deregulation,” said Indonesian Chamber of Commerce and Industry (Kadin) deputy chairman for trade, Benny Soetrisno.