Thu, 18 Sep 2008
The government has questioned a new report from the World Bank's investment arm, the International Finance Corporation (IFC), which says Indonesia has slipped two notches down its list for 2009 to 129 of 181 countries surveyed.

The IFC official overseeing operation, business enabling and environment advisory services, Fararitri Widyadari, said the slip was mainly because the government had imposed a high minimum starting capital for business.

"The government raised the starting capital from Rp5 million to Rp12.5 million," Fararitri said, adding that 79 other countries surveyed did not impose a starting capital requirement.

A press release issued on Wednesday night by the coordinating ministry of economic affairs only hours after the release of the IFC report said the higher minimum start-up capital had been imposed to ensure that people starting companies were bona fide.

It added that the cost of setting up a business appeared to be the only reason for Indonesia to be seen as performing worse, when many other steps had been taken to improve the business climate.

The statement also noted that investment was improving, evidence that its reforms were producing a positive effect.

An independent analyst who attended the launch of the IFC report also noted that while it was called the 2009 report, it actually used data from 2007 and did not take into account a range of steps taken this year.

IFC Indonesia country manager Adam Sack said in a statement sent to The Jakarta Post that the IFC did recognize that the government was working to improve business conditions.

"We know the Indonesian government is committed to improving the business climate. There is a pipeline of reforms that I am hopeful will positively impact Indonesia's Doing Business ranking next year," he said.



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