Date
22 October 2017
President Joko Widodo is promising more deregulation after lifting certain hurdles to investment and licensing. Photo: Intenet
President Joko Widodo is promising more deregulation after lifting certain hurdles to investment and licensing. Photo: Intenet

Indonesia loosens business regulations

Indonesia, long hampered by red tape and grappling with its slowest growth in six years, has relaxed business regulations to attract foreign investment.

The move is also seen as an attempt to burnish President Joko Widodo’s reformist credentials as he nears his year anniversary in office.

On Wednesday, Widodo said the government had simplified or removed 89 regulations deemed to be hindering business and investment.

These include business licensing and trading permits, according to the Wall Street Journal.

More deregulation will follow this month and in October, he said.

The first batch of easing “will strengthen national industry, help develop micro businesses, facilitate trade between the regions in Indonesia and invigorate the tourism industry”, Widodo said.

The government is simplifying the process of obtaining operating permits and access to land to help expedite strategic infrastructure projects.

It will boost investment in the property sector, diversify imports of beef and cattle and make it easier for non-residents to open bank accounts and for tourists to get visas.

Analysts welcomed the move but said more would be needed to assure foreign businesses put off by a lack of legal certainty and policy coordination in this nation of 250 million people.

Some of the regulations investors were hoping would be loosened — such as rigid labor restrictions, import tariffs and a ban on the export of some unprocessed commodities such as bauxite and nickel — were not included in Wednesday’s announcement.

Bill Sullivan, a legal adviser to many large foreign mining firms, said changes to policies were happening but not fast enough and often failed to deliver.

The government has staked a lot of credibility on “whiz-bang” stimulants, he said.

But he said he doesn’t expect major overhauls.

“There will be tweaks,” Sullivan said. “But tweaks are not what people are looking for.”

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