Investor-Unfriendly Regulations

PRESIDENT Joko Widodo's objective to attract Rp3.5 quadrillion in foreign investment throughout his five-year term could turn out to be an unfulfilled dream if thousands of thorny regional regulations remain in force. It is a fact that the absurd regulations cooked up by little 'emperors' in the regions, in the forms of unfair levies and complex permit procedures, are gnawing at the country's economy like a chronic disease.

In the second year of his administration, Jokowi asked regional chief executives to repeal 3,143 such regulations, a measure critical to make Indonesia more competitive in attracting foreign investors. Amid a myriad of investment options available in other countries, our regulations must be attractive to investors. According to the World Bank's June 2015 index on the ease of doing business, Indonesia ranked a low 109th out of 189 countries. This leaves the government no choice but to fix the consequences of having delegated too much authority to regional chiefs.

June 28, 2016