Indonesia’s deregulation plan to begin with revoking 40 regulations

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President Joko “Jokowi” Widodo has instructed the Investment Coordinating Board (BKPM) to process all forms of licensing in a move that is expected to significantly improve Indonesia’s ranking on the World Bank’s ease of doing business index.

The instruction followed a Cabinet meeting on the ease of doing business at the Presidential Office on Thursday, Cabinet Secretary Pramono Anung said. Aside from the move to streamline business licensing, Jokowi also instructed the ministries to revoke at least 40 ministerial regulations deemed to be hampering investment by December, he said.

“President has decided that the authority for licensing will fully rest with the BKPM, particularly [for licenses] that pertain to the ease of doing business,” Pramono said after the meeting on Thursday.

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Following the instruction, the President had tasked the BKPM with improving the country’s ease of doing business ranking to between 40th and 50th by 2021, Pramono said.

In the report released by the Washington, DC-based institution in October, Indonesia’s ranking stagnated at 73rd position, lower than that of regional peers Malaysia and Thailand, which ranked 12th and 21st, respectively.

BKPM head Bahlil Lahadalia said overlap in authority across ministries and government institutions was one of the causes of the suboptimal use of the government’s Online Single Submission (OSS) system, a web-based licensing portal launched to cut red tape and streamline licensing procedures across all levels of the government.

“With the OSS, [investors] can get the business registration number within three hours, but the number cannot be used to realize their business activities, because they have to obtain licenses from ministries, government institutions or regional administrations,” said Bahlil. “That happens because the licensing [process] is not centralized at the BKPM.”

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