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IFC report neglects context - Indonesian govt


September 12, 2008

Investment climate survey:
IFC report neglects context - Indonesian govt

Indonesian government published a statement on Thursday debating a conclusion of a survey by the World Bank's investment arm, International Finance Corporation, on Indonesia's investment climate, reported local daily the Jakarta Post.

The IFC survey, Doing Business 2009, ranks Indonesia as the 129th out of 181 surveyed in terms of ease of doing business, down two notches from 127 in last year's survey.

The survey ranks Indonesia far below many of its regional peers; Vietnam was ranked 92nd, Brunei Darussalam 88th, Malaysia 20th, Thailand 13th, and Singapore, who topped the list as the most attractive place to do business.

The main reason behind the set back, the IFC said, was because the government had raised the minimum capital to start a company from Rp 20 million to Rp 50 million while other countries already scrapping such limitation.

The Coordinating Ministry for Economy argues in a statement that the survey has failed to acknowledge the context behind the  policy.

"Our consideration (for the policy) was to enhance business certainty in the country, by filtering company owner's capability and reliability," says the release.

The ministry also cites a record from the Investment Coordinating Board (BKPM), saying that investment growth has been increasing significantly during the year's first semester compared to the same period last year.

BKPM recorded that investment grew by 15.4 percent and 12.8 percent during the years first and second quarter, increasing investment ratio to the Gross National Product by 23.3 percent
during the first semester.

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