Online Licensing Still Faces Hurdles
The government may have shown improvement in cutting the long process of applying for business permits through a single licensing system, yet experts say it has come up short in reducing unnecessary regulations that often discourage investors.
The impending implementation of the online single submission (OSS) system for business permits is a step in the right direction as it would help reduce bureaucratic hurdles, but further deregulation is needed, said Robert Endi Jaweng, executive director of Regional Autonomy Watch (KPPOD).
“For me, this is a progressive step from the central government, but it is only one part of licensing reform,” Robert told The Jakarta Post on Monday.
He said the amount and types of licenses and permits should be reduced to a more reasonable level as the regions had yet to carry out relevant reforms.
A case in point is Jakarta, which has 300 different business permit types, while Central Kalimantan has 181, One region, Robert said, has as many as 518.
“The central government doesn’t even have a complete list of the different permits in each region,” he said. “It is still making an inventory of them.”
The OSS is expected to enable investors to submit related documents required in business license applications through an integrated online system.
The system, slated for launch in April, will be supervised and processed by several taskforces at central, regional and local government levels, as part of a presidential decree called the 16th economic reform package.
Licensing for cooperatives will also be integrated in the system, taking it away from the jurisdiction of the Cooperatives and Small and Medium Enterprises Ministry.
“All applications for permits will go through the OSS, including for cooperative licensing, which will move to the Law and Human Rights Ministry,” Cooperatives and Small and Medium Enterprises Minister Anak Agung Gede Ngurah Puspayoga said after a meeting on Monday.
Puspayoga said his ministry would remain in charge of guiding and developing cooperatives.
Improving Indonesia’s ease of doing business and thus making it more attractive to international investors has been among President Joko “Jokowi” Widodo’s priorities.
As the government set an investment realization target of Rp 765 trillion (US$ 55.7 billion) this year, Investment Coordinating Board head Thomas Lembong said he hoped the OSS would eliminate sectorial ego, in which agencies only deal with matters related to its authority.
However, based on the latest data from the Office of the Coordinating Economic Minister, four provinces and 301 regencies and municipalities have yet to form the taskforces required for the establishment of the OSS.
Coordinating Economic Minister Darmin Nasution is scheduled to meet 440 regional heads on Wednesday to discuss the implementation of the OSS.
Robert of the KPPOD said even the regions that had formed taskforces were not necessarily ready to effectively implement the system.
“That data is taken from reports. What we see in the field is very different,” he said, citing his observations on recent trips to Kupang, East Nusa Tenggara and Palangka Raya, Central Kalimantan.
Robert stood by his opinion that the government should ensure that deregulation should be carried out in parallel with the OSS as “investors and business people are allergic to uncertainty”.
“Right now, it is very difficult to predict regulations from region to region,” he said. “In tourism, for example, it is hard for a company to plan everything from the entrance to the exit point because of the variation.”
He acknowledged, however, that meaningful deregulation required strong political will that might be lacking in many regions, saying that “deregulation is a reflection of the attitudes of regional leaders”.
“If they are truly committed to attracting investment, they will work on it seriously. However, if they are only looking at the next five years, then they will keep adding hurdles to increase regional revenue.” (kmt)
--- (The Jakarta Post – Tuesday, 27 March 2018) ---
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