Jakarta: According to the World Bank's 2020 Ease of Doing Business (EoDB) report, Indonesia has yet to be promoted from its current ranking on 73rd out of 190 countries.
The current ranking is far from the expected ranking of 40th which Jokowi has promised that Indonesia would be placed on in the ranking.
Gadjah Mada University economist, Fahmy Radhi, said that the Indonesia’s unchanged ranking is still acceptable given that improvements in different economic sectors take a lot of time.
“The massive 35,000-megawatt electricity project has yet to be finished and there will be possible delays in the course of its development. The regulatory reform takes a lot of time, since it involves the central government and regional governments,” he said here on Sunday, October 27, 2019.
He also added that the procedure on importation and exportation is still quite complex in comparison to that in Singapore and Vietnam though the government has announced that there will be procedural reform.
He hopes that the forthcoming omnibus law can reform regulations in order to increase the ease of doing business in Indonesia. The omnibus law is also expected to attract foreign direct investment since it gives legal certainty. This can help promote Indonesia’s ranking on the EoDB list to the expected target of 40th.
Besides regulatory reform, Fahmy said that the government must also be able to give legal certainty since reforming the regulation in brief time can instead cause legal uncertainty in Indonesia.
“As an example, the KPK law revision which can weaken the Corruption Eradication Commission (KPK), may possibly allow white-collar criminals to bribe officials in charge of business licensing, which in turn can increase the high cost of economy. This will instead lead to the decrease of foreign direct investment in Indonesia,” said Fahmy.
He said that without comprehensive reform, not just in the procedural reform but also in giving legal certainty, Indonesia’s ranking on the EoDB category may not change. (Faustinus Nua) (Translator: Muhammad Gestinev)