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Jakarta Post

More ministries, more red tape

For businesses, however, a bloated cabinet will be a headache, as this will constitute more bureaucratic hurdles to deal with and more red tape.

Editorial board (The Jakarta Post)
Jakarta
Fri, October 4, 2024

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More ministries, more red tape The Onward Indonesia Cabinet after the announcement on Wednesday. (JP/Seto Wardhana)
Versi Bahasa Indonesia

As the saying goes, “the more the merrier”, but this should not necessarily be the case when it comes to the cabinet.

It is true that president-elect Prabowo Subianto has yet to decide on the number of ministries and agencies he will form after he assumes power on Oct. 20. The House of Representatives, however, has paved the way for Prabowo’s intentions, if any, to expand the cabinet. The House recently approved revision of the Ministry Law, removing the maximum number of 34 ministries, allowing a president to appoint as many ministers as he or she sees fit.

The possibilities could be endless. Some politicians within the Onward Indonesia Coalition suggest the number may rise to at least 44.

Allies and political parties backing the president-elect may regard this as good news as Prabowo will make sure everyone gets a slice of the pie. Currently, seven of the eight parties in the House support Prabowo.

For businesses, however, the bloated cabinet will be a headache, as this will constitute more bureaucratic hurdles to deal with and more red tape, a hindrance to the ease of doing business.

We expect businesses will need to learn every new bureaucratic path and legal framework, as their previous knowledge will soon become obsolete. The process could be costly for the economy.

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Adding more ministries can lead to inefficiency and complicate coordination in formulating and implementing regulations, with businesses likely to suffer the most and the economy and consumers eventually paying the price.

This is not a good sign when the regulatory environment really matters for investors, as only countries that can offer the best possible performance will attract the investment needed to prop up the economy.

The government of outgoing President Joko “Jokowi” Widodo and the new administration may argue that the country has already established the online single submission (OSS), an integrated government licensing service capable of integrating business licensing processes across many institutions in Indonesia, which many describe as “a jungle”.

However, let’s be realistic. Business owners still face layers of complex procedures despite the new system being in place since 2018, and implementation in the field remains inconsistent.

This is the right time to actually make the OSS work as promised. Failing to do so will just put businesses and investments in Indonesia further at risk.

Some might argue that debureaucratization could help focus policies if done right, as this would involve separating certain functions from existing ministries into two or more institutions.

However, that will only be possible if we have the right man or woman in the right place to coordinate an even larger number of different institutions, which even with the current number of ministries is proving to be somewhat challenging.

What’s the real use of having more people if they can neither work together nor coordinate to form a united policy needed to run the economy? This might be concerning, as sectoral egos have been identified as a drawback of the current government.

What we need today is state institutions that can deliver their services in the most cost-effective way possible. The incoming government will agree if it cares about the economy.

If adding more ministries only slows and lengthens the processing times for required approvals, the next administration should just shelve the plan.

This would be one of the ways to prove that the new government is sticking to its own “pro-business” promise.

While it is true that there is no definitive number of ministries that will allow a given government to function effectively and efficiently, we simply cannot afford a larger cabinet that will make business and our lives more difficult.

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