Indonesia Intends to Ease Bureaucracy Further to Attract Investments
It was reported in Investor Daily on Monday (03/03) that the Indonesian government intends to cut back some of the country's notorious bureaucracy regarding investment permits, thus speeding up the process for permit applications. Economic Minister Hatta Rajasa stated that, although Indonesia already has had significant success in reducing bureaucracy in recent years, investors are still put off by the lengthy application process. This is a particular problem in the country's oil and gas sector.
As an example of Indonesia's success in curtailing bureaucracy so far, Rajasa mentioned that the difficulty and time needed for permits within the Contractors Cooperation Contract (Kontraktor Kontrak Kerja Sama, or KKKS) framework have been eased. For example, the land area that is allowed to be freed for drilling activities was expanded from two hectares to currently five hectares. This revision is important has it saves time (and money) for the investor. Rajasa said that such a revision was not easy as it needed approval and cooperation from more than a dozen ministries. Another major bottleneck to curtailing the nation's bureaucracy - since the start of decentralization - is that it can conflict with local governments' authority.
However, no further details or timeframe were provided by Rajasa.