1. 1 MIERTA CAPAUL Product Leader Investment Climate Advisory Services The World Bank Group Jakarta December 15, 2009 www.doingbusiness.org/Indonesia

2. Doing Business – Overview Doing Business measures the regulations applying to domestic small and medium-size companies through their life cycle 10 indicators in 183 countries The objective: well-designed, streamlined regulations, accessible to all Doing Business 2010 is the 7th report

3. Asia is reforming Indonesia, represented by Jakarta, is Asia’s most active reformer of business regulations in 2008/09 Reforms introduced in 3 areas improved the country’s ranking by 7 places Ranking on the ease of doing business 2010

4. Subnational Doing Business Expands the DB indicators beyond the most populous city Captures local differences in regulations or enforcement Includes rules and regulations at all levels of government Gives specific locations an opportunity to tell their story Provides a tool for locations to compete globally Provides information on good practices within the same country that can be easily replicated Combines media appeal of DB with active participation of subnational governments in the reform process

5. Doing Business in Indonesia 2010 Measures an entrepreneur’s every step and the associated time and cost; studies national and local regulations in 3 areas: Starting a business Dealing with construction permits Registering property Data were collected with the help of more than 160 private sector contributors and public sector officials

6. Doing Business in Indonesia 2010 covers 14 cities Balikpapan Banda Aceh Bandung Denpasar Jakarta Makassar Manado Palangka Raya Palembang Pekanbaru Semarang Surabaya Surakarta Yogyakarta o Surakarta

7. Yogyakarta and Bandung are leading the ranks in the 3 areas measured by the report City Ease of starting a business Ease of dealing with construction permits Ease of registering property Balikpapan8814 Banda Aceh 6108 Bandung531 Denpasar10118 Jakarta7132 Makassar9210 Manado14123 Palangka Raya 335 Palembang466 Pekanbaru1174 Semarang13511 Surabaya11146 Surakarta2913 Yogyakarta1112

8. Dealing with construction permits—many local differences during pre-construction

9. Days Cost (% of GNI per capita) Time and cost to deal with construction permits

10. Time and cost to transfer a property title Days Cost (% of property value)

11. Registering property is faster in Manado than in Surakarta

12. Days Cost (% of GNI per capita) Time and cost to start a business

13. Starting a business in Yogyakarta—easiest in Indonesia

14. Indicator Indonesia's global performance in DB2010 (represented by Jakarta) Best performing city within Indonesia Best local practice Global rank (183 economies) How Indonesian cities would compare globally Number of procedures to deal with construction permits 14 proceduresYogyakarta8 procedures5 Days to deal with construction permits 160 daysMakassar56 days9 Days to register property 22 daysManado12 days24 Cost to deal with construction permits 194.8% of income per capita Semarang 107.6% of income per capita 78 Number of procedures to start a business 9 procedures Yogyakarta, Palangka Raya, Surakarta 8 procedures93 Days to start a business 60 daysYogyakarta, Bandung43 days143 Some cities perform up to international standards in certain areas

15. 75% 9 reformers 90% 28 reformers Number of states 2005 - 20072007 - 2009 ► Great Impact Political support for reform efforts has continued even after two rounds of local elections and one presidential election since first benchmark 59 reforms recorded in 3 years Methodology transfer to local think-tank with support from Mexican government and WBG quality control reformersNon reformers Doing Business in Mexico 2005, 2007 & 2009 Competition and peer learning drive reforms

16. Why does it matter? Evidence from business start-up reform in Mexico Evaluation of impact on formal firm creation of a municipal reform which decreased the time to obtain an operation license from average 30 to 2 days in 93 municipalities. Increase in new start-ups by about 4% (Kaplan, 2006) Increase in employment in eligible industries by 2.8% (Bruhn, 2008) Indicative of how policy reform can lead to substantial real impact

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