Doing Business in Indonesia: lessons on reforming from within

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 Subnational Doing Business Indonesia 2010 The World Bank's Doing Business team has been keeping busy, launching today the first subnational Doing Business in Indonesia 2010 (Doing Business in The Arab World and Russia were also recently launched, as were Paying Taxes and Getting Electricity).

From the opening pages:

For the first time, Doing Business goes beyond Jakarta to compare cities within Indonesia and identify opportunities for collaboration between national and local governments to cut red tape and reduce the cost of doing business. Although there are differences in the number of procedures, time, and cost to do business in Indonesia, the report finds that some cities already perform up to international standards.

What I find most fascinating about the Indonesia report is the disparity in regional performance, which can actually be viewed as a good thing, as it allows regions to learn from one another, rather than from outside countries who may have very different legal frameworks, systems of governance, economic structure, etc.

In some parts of Indonesia, it is quite easy and efficient to do business. These regions can serve as models of change for other parts of the country:

The report suggests that cities in Indonesia can learn from each other and adopt good practices that are already working within the country.

Effective coordination between zoning and building authorities puts Yogyakarta in the top 10 globally on the number of procedures for dealing with construction permits. In Manado, transferring a property title takes the same time as in the United States and puts the city into position 24 worldwide.

It is much more difficult for authorities in Jakarta to emulate the practices of Singapore or New Zealand than, say, those of neighboring Bandung. By highlighting where Indonesia's cities can look for guidance from within the country, the new Doing Business report should serve as an important facilitator of reform.

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