Tue, 15 Dec 2009
Most regional administrations in the country are still lagging in the quality of services given to investors, a survey carried out by the Regional Autonomy Watch (KPPOD) reveals.

A survey, conducted in 291 regencies and cities across the country, shows that the quality of regional investment support was far below expectations in 2009, although eight years after the enactment of the regional autonomy law.

In its report, which marks also the agency’s full-year performance assessment, KPPOD said on
Monday that investors were still faced with classic problems in applying for investment permits in the regions.

Only 2 percent of 1,100 investors surveyed said they had spent less time and costs than predicted by the local authorities. Twenty percent of them claimed to have spent more time and money in
processing their investment permit applications.

The International Finance Corporation (IFC) released its Doing Business report in September showing that Indonesia on average has cut the time needed to start a business by 16 days and the time to transfer a property by 17 days. But the country’s global ranking only moved up to 122 from 129 on the global ease of doing business.

However, KPPOD said that the IFC’s report only revealed these improvements on average

“Geographically, regions with the best quality in service are mostly located on Java Island,” KPPOD’s researcher Boedi Rheza said.

But even the regions with the best service quality, namely Yogyakarta and Purwakarta regency, only scored 66.7 out of a total of 100 in the KPPOD survey. Regions outside Java scored much lower.

The watchdog had high hopes for the implementation of regional autonomy during 2009 because almost all the regulations required for getting the autonomous regions working at full scope had already been issued by 2007.

But in reality, the decentralization has yet to produce a significant impact on economic development and implementation of good governance in the regions, KPPOD said.

Boedi blamed poor implementation and lack of administrative reform as being the core problems in the regions’ lack of quality services.

“There are also problems of inconsistency and incoherence in the regulatory frameworks of central government, whether on horizontal or vertical regulations,” he said, adding that the 2009 Law on

Regional tax and retribution may potentially spark problems in its implementation.

The law was endorsed in August to enhance the fiscal capacity of regions and make them less dependent on central government. Regional administrations should be able to bring in bylaws to help raise revenue but without causing problems for the local investment climate.

Boedi, however, doubted the regions’ readiness to implement this law. “They need to be ready in tax collecting and administrative affairs The central government must also immediately issue decrees to serve as operational guidelines for the regions,” he said. (adh)



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