Jakarta, September 9, 2009—Indonesia is Asia’s most active reformer of business regulations in 2008/2009, making its rules more efficient to help increase opportunities for local firms. Indonesia cut the time required to start a business by 16 days and the time to transfer a property by 17 days. In a record year for regulatory reform worldwide, most other economies in East Asia and the Pacific also strengthened business regulations. Singapore, New Zealand, and Hong Kong, in that order, led the world in the ease of doing business.
Between June 2008 and May 2009 a record 131 of 183 economies around the globe reformed business regulation, according to Doing Business 2010: Reforming through Difficult Times, the seventh in a series of annual reports published by IFC and the World Bank and released today in Washington DC. In East Asia and the Pacific, 17 of 24 economies made reforms against the backdrop of the global economic crisis.
“The achievements of the Indonesian Government as captured in this report is an excellent demonstration of team work and leadership from the economic ministers, based on the policies set out by the Minister of Finance, Minister of Trade, Minister of Industry, and the Coordinating Ministry of Economic Affairs,” said Muhammad Lutfi, Chairman of Indonesia’s Investment Coordinating Board (BKPM). “Going forward, BKPM will continue to work to address our three main challenges: improving public service that includes investment approval and licensing, capacity building especially front liners and back office capability, and investment promotion.”
“Indonesia has implemented a significant number of reforms to improve the ease of doing business, and we congratulate the government of Indonesia for an improved ranking in this year’s Doing Business report,” said Adam Sack, IFC Country Manager for Indonesia. “Going forward, the Indonesian Government needs to maintain a consistent pace of reform implementation to improve the quality of business regulations, which will improve the investment climate, sustain strong economic growth rates, create more jobs and alleviate poverty.”
In 2008/2009, Indonesia also strengthened disclosure requirements for transactions between company insiders and other companies they control to protect investors.
IFC, the member of the World Bank Group focused on private sector development, is working through its Investment Climate Advisory Services with the national and local governments of Indonesia to reform policies on starting a business. IFC also supports the national government’s initiative to establish licensing offices in all cities and districts (National One-Stop-Shop).
"In the span of just a decade Indonesia has attained remarkable achievements with democratization, decentralization, and economic and financial stability, even in the face of the global financial crisis," said Joachim von Amsberg, World Bank Country Director for Indonesia. "Indonesia has the opportunity to grow rapidly over the next years. With even more drastic regulatory reforms to cut red-tape and bureaucracy, Indonesia can improve the environment for the private sector and especially for small and medium-size enterprises that generate most jobs."
Singapore, a consistent reformer, is the top-ranked economy on the ease of doing business for the fourth year in a row, with New Zealand as runner-up. Singapore introduced online and computer-based services to ease business start-up, construction permits, and property transfers.
Doing Business ranks 183 economies based on 10 indicators of business regulations that track the time and cost needed by domestic companies to meet business regulations such as starting and operating a business, trading across borders, paying taxes, or closing a business. In this year’s report, Indonesia moved up to 122 from 129 in the global ease of doing business ranking as a result of its reforms. Doing Business does not measure all aspects of the business environment that matter to firms and investors. For example, it does not measure security, macroeconomic stability, corruption, skill level, or the strength of financial systems.
About the World Bank Group
The World Bank Group is one of the world’s largest sources of funding and knowledge for developing countries. It comprises five closely associated institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). Each institution plays a distinct role in the mission to fight poverty and improve living standards for people in the developing world.