Indonesia Climbs Global Ease-of-Doing-Business Rankings

Indonesian Version

 
Marcell Sihombing, Fitri N. Heriani
 

 

The government’s efforts to improve the various criteria which combine to produce the country’s ease-of-doing-business ranking are finally paying off. According to official results released by the World Bank in the “2017 Ease of Doing Business” (EODB) survey, Indonesia has managed to advance some 15 positions on the World Bank listings to 91^st place from its 2016 placing of 106^th position, and 29 positions from its 2015 placing of 120^th position.
 
“At present, Indonesia successfully outranks the Philippines, Brazil, and India,” stated Dalyono, the Head of the Fiscal Policy Agency’s (Badan Kebijakan Fiskal - BKF) International Economy Analysis Department over at the Ministry of Finance in Jakarta on 15 November 2016.
 
Indeed, the government has been working hard in order to roll back various inefficient regulatory frameworks at both the central and regional levels, and this has resulted in a much-needed simplification of the country’s licensing procedures, a reduction in license processing times, as well as the revocation of certain regulations which were deemed to be hampering investment.
 
In spite of this significant improvement however, Indonesia has actually only advanced in seven of ten EODB indicators, specifically: “starting a business” (an improvement of 16 places); “getting electricity” (an improvement of 12 places); “registering property” (an improvement of five places); “getting credit” (an improvement of eight places); “paying taxes” (an improvement of 11 places); “trading across borders” (an improvement of five places); and “enforcing contracts (an improvement of five places).”
 
Meanwhile, the remaining three indicators have shown a decline on previous rankings, specifically: “dealing with construction permits” (a fall of three places); “protecting minority investors” (a fall of one place); and “resolving insolvency” (a fall of two places). Unfortunately, Mr. Dalyono was unable to clearly explain the reason behind the decline in these indicators.
 
“The government’s efforts to improve the country’s EODB ranking encompass processes of deregulation and de-bureaucratization, which are being implemented through a series of economic-policy packages. These packages are now starting to have a significant impact, however there is still room for further improvements to be made,” Mr. Dalyono asserted.
 
Juda Agung, the Executive Director of Bank Indonesia’s (BI) Monetary and Economy Department, asserted that BI had already predicted that the improvement of certain macroeconomic indicators, as well as the implementation of the tax-amnesty program, would ultimately lead to a positive outlook for the country’s economy as a whole during 2017. Indeed, Mr. Agung is optimistic that Indonesia’s economy during the course of the next year will outperform previous years, in spite of the uncertainties which still persist within the global marketplace.
 
Mr. Agung also asserted that the country’s economy had been growing steadily. In fact, economic growth posted during the third quarter of 2016 reached 5.02% of gross domestic income (PDB), while the figure for this year as a whole should also be around the 5% marker. Nevertheless, if the above figures are set alongside the prevailing economic conditions during the second quarter of 2016, then Indonesia's current economic situation is still not that positive.
 
Mr. Agung went on to explain that the repatriated funds which are currently being generated through the tax-amnesty program will be channeled towards maintaining the liquidity of Indonesia’s domestic financial market. It is predicted that some IDR 143 trillion of repatriated money will have been deposited in Indonesian banks by December 2016 and these funds have been earmarked to serve as additional funding for various national activities and projects.
 
(cd/sp)