Georgia: RI’s example for business ease
18 September, 2016
Georgia: RI’s example for business ease
Looking at how Georgia significantly improved its ease of doing business (EODB) ranking from 112th to eighth , the Indonesian government is encouraged that the magic could also work here, The Jakarta Post reports.

“President Joko “Jokowi” Widodo has pushed his ministries to bring the country’s EODB rank to 40th next year from the current 109th, while Georgia, an ex-Soviet Union country, achieved its improvement in 10 years from 2004 to 2014.

The ministries have launched 13 economic packages so
far to cut hundreds of procedures to let businesspeople register their businesses in easier ways without unnecessary document requirements.

However, the implementation is tricky in the field, especially for agencies in the regions and technical ministries that are used to their old habits of following inefficient bureaucratic steps.

“The central Investment Coordinating Board [BKPM] has done its job well. They always serve us fast, but sometimes they also require us to attain certain documents from the regional board [BKPMD] or technical ministries,” said Brigitta Rahayoe, a managing partner at her own law firm, during an EODB policy dialogue held by the Trade Ministry in Jakarta on Thursday.

“These two take so long to give us documents and they often refer us back to the central board and the central board refers us back to the regional one, which shows a lack of coordination,” she added.

Georgia’s former minister of economics and sustainable development, Vera Kobalia, one of the main speakers at the discussion, shared her country’s experience.

Once the most corrupt country in Eastern Europe, Georgia is now the top global reformer in terms of the EODB, according to the World Bank. It started by reforming its corrupt police force, instead of sections directly related to its economy and regulations.

In 2003, the Georgian government fired every police officer and civil servant in other bodies that were notorious for extorting money out of the public.

It then started recruiting new staff with improved monthly salaries of US$30 to $1,800, consolidated 18 ministries into 12, downsized the public sector by two-thirds, reduced types of permits and licenses to 50 and 86 respectively and simplified tax types from 22 to six, leading to more tax revenues in reality as businesspeople came to understand the simpler system better.

However, deregulation did not lead directly to effective implementation if the performances of executors, i.e, agencies in the field, were not evaluated first and foremost, said Kobalia, who is now an international business advisor of the Australia-Indonesia Partnership for Economic Governance (AIPEG).

Indonesian Employers Association (Apindo) consultative board secretary Chris Kanter agreed with the idea of reforming government bodies and officials.

Chris said Indonesia might not need to fire its police officers, especially given the size of the force in a country with a greater than 250 million population, compared to Georgia, which had a population of less than 5 million. “But I seriously agree reform should start with every single individual in the state bodies.”

Nevertheless, the serious reform is acknowledged by law firm consultants attending the discussion to have happened in Jakarta, having seen business setup process shortened to one month from six months in the past.

In January 2015, the capital city formed a one-stop integrated service (PTSP) that provided shortcuts to set up businesses. Procedures that were previously done through various institutions were relegated to a single office,” The Jakarta Post reports.

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