The Ease of Doing Business in Indonesia was being Stagnant, Why?

TRIBUNBATAM.id - Indonesia's ease of doing business (EoDB) ranking is stagnant in 73rd position out of 115 countries in the world.

Although in terms of rank did not change, Indonesia recorded an increase in scores on the index from 67.96 last year to 69.6.

In its latest report, the World Bank highlights a number of factors that support the ease of business in Indonesia such as the process of starting a business, taxation matters, to cross-border trading activities. 

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"Indonesia simplifies the process of starting a business by introducing an online platform for business licenses and replacing print certificates with electronic certificates," wrote a report received by Kompas.com, Jakarta, Friday (10/24/2019). 

For information, the World Bank Doing Business report is based on a simple method for calculating which economies have improved business ease.

One of the issues highlighted by the World Bank in the report is employment.

Indonesia has become one of the lower middle income category countries that has the most labor regulations, especially regarding recruitment. 

In research cited by the World Bank, companies in developing countries generally have difficulty paying minimum wages to their workers because the ratio of minimum wages to median income is too high compared to ratios in high-income countries.

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"For example, a 10 percent increase in minimum wages in Indonesia is associated with a 0.8 percent decrease in average employment in certain provinces," the World Bank report said.

However, in terms of taxation, the World Bank is considered easier because of the online filling system and the introduction of a new system for taxpayers, which applies in Jakarta and Surabaya. 

In addition, business activities in Jakarta and Surabaya have also been judged to have become much easier after the government introduced an electronic case management system for law enforcement.

"Indonesia makes cross-border trade easier by increasing the online processing of customs declarations. This reform applies to Jakarta and Surabaya," the report said. (*) 

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