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Country Snapshot - Indonesia  

HighlightsRankingsQuantitative DataLegislationAnalytical WorkProject Portfolio
  • East Asia & Pacific
  • Lower middle income
  • 232,516,771 (2011)
  • 2,580
Indonesia Flag
Below are select highlights for the data included in the profile.

  1. Indonesia’s overall Doing Business ranking has declined this year, reflecting lower scores for six indicators.
  2. According to the latest Enterprise Surveys (2009), Access to Finance and Practices of the Informal Sector represent the major constraints to investment in Indonesia. Of the firms surveyed, 65% report competing with unregistered or informal firms. Only 18% of firms them report having a line of credit or loan from a financial institution.
  3. Indonesia’s economic freedom score is 56, making its economy the 116th freest in the 2011 Index. Its score is 0.5 point better than last year and is improved in half of the measured economic freedoms. Indonesia is ranked 22nd out of 41 countries in the Asia–Pacific region, and its overall score is below the world average. Indonesia has undertaken wide-ranging reforms to address various structural weaknesses in the economy and to make it more competitive. Recording an annual average growth rate of over 5 percent during the past five years, the economy has shown a considerable degree of resilience, weathering the global economic slowdown relatively well.

Subnational Doing Business Report

Doing Business in Indonesia 2010 compares business regulations across 14 Indonesian cities. The report focuses on local and national regulations that affect 3 stages in the life of a small to midsize domestic firm: starting a business, dealing with construction permits, and registering property.

For the first time, Doing Business went beyond Jakarta to compare cities within Indonesia and identify opportunities for collaboration between national and local governments. The report found that some cities already perform up to international standards. Effective coordination between zoning and building authorities put Yogyakarta in the top 10 globally on the number of procedures for dealing with construction permits. In Manado, transferring a property title took the same time as in the United States and put the city into position 24 worldwide. The report suggests that cities in Indonesia can learn from each other and adopt good practices that already work within the country.

Main Findings

  • Yogyakarta and Bandung led the overall ranking on the 3 indicators measured in the report.
  • Completing business registration was faster and easier where business licenses administered by local governments were consolidated at one-stop shops. If Semarang followed the example of Palangka Raya and Yogyakarta and consolidated all local permits, it could speed up the business licensing process by 3 weeks and reduce the number of visits the entrepreneur needed to make by 2.
  • While an entrepreneur in Surakarta had to wait almost 2 months to transfer a property title, he or she could do it in less than 2 weeks in Manado.

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