To Improve Competitiveness, Indonesia Will Emulate Georgia

Georgia has become the top-performing country in terms of reform and competitiveness improvement over the last 10 years. The ranking of this country, situated between Europe and Asia, has steadily improved from 90th in 2006 to 59th in 2016, a 31-level jump. In contrast, Indonesia only improved by 13 levels during the same period, reaching 41st place in 2016.

The Indonesian Investment Coordinating Board (BKPM) notes that the Georgian government successfully overhauled its licensing system. This includes significant improvements in ease of doing business, licensing procedures, and costs. Georgia's ranking for licensing procedures rose from 27th in 2006 to 3rd in 2016, while its ranking for processing time improved from 21st in 2006 to 5th in 2016.

This ease of doing business contrasts sharply with the situation in Indonesia. The 2016 Global Competitiveness Index (GCI) shows that Indonesia's ease of licensing actually worsened, falling from 119th in 2006 to 126th in 2016. Similarly, its ranking for required procedures dropped from 95th to 133rd.

In response, President Joko Widodo has requested a list of ministerial regulations hindering the licensing process. These regulations need to be revised and simplified immediately. The Indonesian government even intends to abolish ministerial regulations that obstruct investment.