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Economic chief demands better cooperation

Darmin Nasution (JP/Arief Suhardiman)The government is not resting on its laurels after major improvement in the country's ranking in the World Bank’s Ease of Doing Business Index as it continues to push for regulatory reform in obtaining business permits in various sectors

Marchio Irfan Gorbiano (The Jakarta Post)
Jakarta
Sat, November 18, 2017

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Economic chief demands better cooperation

Darmin Nasution (JP/Arief Suhardiman)

The government is not resting on its laurels after major improvement in the country's ranking in the World Bank’s Ease of Doing Business Index as it continues to push for regulatory reform in obtaining business permits in various sectors.

The Office of the Coordinating Economic Minister is working with other ministries to identify regulations in each ministry that complicate the process of obtaining permits.

Such a move is aimed at monitoring the implementation of the recently issued Presidential Regulation No. 91/2017 on business implementation acceleration, said Coordinating Economic Minister Darmin Nasution on Friday.

He said some ministries had yet to form a task force, which was mandated in the regulation for coordination purposes in serving businesses.

“We requested them to do so immediately,” said Darmin.

The formation of the task force is needed to achieve the target of developing "online single submission" in March next year, which would enable investors to register businesses online, said Darmin.

He added that the short-term target in the reform was to integrate permits for all business sectors under the One-Stop Integrated Services (PTSP) by January 2018 at the latest.

The regulation was signed by President Joko “Jokowi” Widodo on Sept. 22 in a bid to cut red tape surrounding the process of obtaining business permits.

The regulation mandates the government to form a task force specifically to address the business permit issuance process at various government levels. It also tasks the government with commencing an online single submission trial for business permit applications by January next year.

An expert staffer to Public Works and Public Housing Minister Mochammad Natsir, who attended the meeting with Darmin, said the task force at the ministry had identified improvements that could be made to prevailing regulations.

“We need to confirm with respective director generals pertaining to improvements in prevailing regulations. We are hoping to identify the improvements by next week,” he said.

He also said that under the regulation, respective institutions were not only tasked to cut red tape but to also monitor the implementation of permit issuances.

“For example, if the BKPM [Investment Coordinating Board] asked us [Public Works and Public Housing Ministry} to issue a certain permit, we will monitor the implementation,” he said.

Climbing 19 places, Indonesia made its highest-ever jump to rank 72 out of 190 countries in the World Bank's Ease of Doing Business Index announced on Nov. 1. A higher ranking indicates better and simpler conditions for businesses.

However, Indonesia still lags behind many of its ASEAN peers. Thailand, a country gripped by military rule since being wracked by political chaos in 2014, scored the highest leap to rank at 26 while Vietnam jumped 14 spots to 68th place.

The indicator is based on 11 categories that correspond to the lifecycle of businesses; starting up, accessing the labor market, connecting to electricity, registering property, getting credit, protecting minority investors, trading across borders, paying taxes, enforcing contracts and resolving insolvency.

Thailand and Vietnam ranked higher as Indonesia scored poorly in the categories of starting a business, paying taxes, getting construction permits and red tape in cross-border trading.

According to the World Bank, it takes 23.1 days on average for entrepreneurs to start a business in Indonesia, while it takes a mere four and a half days in Thailand. It also takes 200.2 days in Indonesia to get permits to build a warehouse, while it only takes 104 days in Thailand.

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