Indonesia is number 121 in the world!

I came across this report from World Bank called Doing Business  which ranks each of 183 countries by their easiness of doing business. Out of 183 countries, Indonesia is ranked at 121 for 2011, went down from 2010's 115.

Now remember that 121 is the overall ranking, and that there is a ranking for each areas graded. The areas are:
1. Starting a business: 155. It is not a good grade, and I believe its because of the complexity of paperworks and procedures necessary to establish a business.
2. Dealing with Construction Permits: 60. Not bad. I think there is definitely an improvement over getting the permit, on the simpler procedures and faster processing time.
3. Registering Property:  98. Now getting the permit does not include the registering part of the property. Apparently there is still some lagging in this area.
4.Getting Credit: 116. I believe the low score on this area is caused by the lack of law enforcement regarding the repossession of collateral in the case of credit default. This is the reason of why financial institutions in Indonesia are making it tougher for businesses to get credit. Especially after the 2008 global crisis, everyone is now taking a more conservative approach in giving credits. Also on this area, it involves the registration of individual citizens for their credit profile. So far, Indonesia has none of this records whatsoever. This non-existent credit profiling system drops our score.
5. Protecting Investors: 44. This is a very good score for Indonesia. It is witnessed by the gigantic amount of money flowing into the country from foreign investors in 2010. Really a job well done here.
6. Paying Taxes: 130. I guess this is sort of expected of Indonesia to be lagging in this area because corruption has been "flowing in our vein." Over the course of my lifetime, I have seen countless amount of corruption both in small and larger scale done by all sorts of people. Its been a public secret that many businesses avoid formal  taxes by paying a sum of money to the tax collector to get a lower rate (much lower).
7. Trading across Borders: 47. This involves amount of paperwork, cost and speed in completing export and import activities. With the establishment of free trade among the ASEAN members, this has to be kept really well in order to take advantage of the trading system.
8. Enforcing Contracts: 154. An area that we really need to improve here. Our worst point in this area is that on average, the cost of enforcing the contract is 122.7% of the claim. This makes it useless to be pursued. I mean why bother wasting money, time, and other resources just to end up losing more money than we already had?
9. Closing a Business: 142. It takes an average of 5.5 years to close a business in Indonesia . Also, the average recovery rate is only 13.2 cents of a dollar (compared to 69.2 cents from the best practice). This area is closely related with the other areas mentioned previously. If we can enforce contracts better, then we can expect an improvement on this.

Given the fact that Indonesia still falls in the category of Developing Country, then we are not doing too bad. But there is a large room for improvement of course. And hopefully, we are heading that way.

For more information, check out http://doingbusiness.org/data/exploreeconomies/indonesia/