Indonesia’s poor showing in an international survey on the ease of doing business has prompted the government to respond that insufficient weight was given to key improvements in Southeast Asia’s biggest economy.

Indonesia fell two notches to 129th place out of 181 countries in the Doing Business 2009 survey released by the International Finance Corporation, the World Bank’s private arm, last week.
The lower ranking is a sore point for the government. Indonesia will hold parliamentary and presidential elections next year, and economic performance and reform measures are likely to be among the key issues. Indonesia’s ranking is well below that of many of its regional peers, including Papua New Guinea in 95th place, Vietnam in 92nd, Malaysia in 20th, and Thailand in 13th.
Under President Susilo Bambang Yudhoyono, who was elected in 2004 on promises to tackle corruption, boost economic growth and create jobs, Indonesia has taken several steps to improve its business climate, including an overhaul of the tax system which will result in lower taxes for firms and individuals next year.
Companies can now start a business in 76 days, instead of taking 105 days previously, steps for obtaining permits have been simplified, and the cost of starting a business has fallen, Indonesia’s coordinating ministry for economic affairs said in a statement last week, in response to the report.
“The survey does not take into account that the reason for this increase is to improve assurance” in doing business in Indonesia by improving the owners’ qualifications, it said.
With its poor infrastructure, Indonesia desperately needs to raise billions of dollars to build new roads, ports, power station and railways, in order to drive economic growth and reduce high unemployment.
(Source: Daily Times)