RESEARCH ON DEBUREAUCRATIZATION IN INDONESIAN BUSINESS LICENSING WINS 1ST BEST CONFERENCE PAPER AWARD
Licensing is one of the government regulations that entrepreneurs need to hurdle in starting their own business. Unfortunately, this is where companies encounter bottlenecks in applying for permits and licenses. This poses transaction costs that would potentially discourage investments and eventually slow down the economy. This is especially evident in the case of Indonesia, which is ranked 41st in terms of the Competitiveness Index and 91st out of 190 countries in the recent World Bank’s Ease of Doing Business (EoDB) index.
It is under this context that Mr. Muhammad Syafiq and his colleague Mr. Naufal Sabda Auliya, researchers from the National Institute of Public Administration, Indonesia, explored means by which they can simplify business licensing in their country. Their study, “Public Perception Survey as an Early Warning Method in Reducing Negative Impact of Bureaucratization,” bagged the first Carlos P. Ramos Award for Best Conference Paper during the 2017 EROPA Conference in Seoul, Korea. Syafiq, Deputy for Policy Research of NIPA-RI, received the Award on behalf of his research team.
Aside from identifying what made business licensing difficult, Syafiq and Auliya also looked into how data from public perception surveys can be used to simplify the process. In particular, the survey data may serve as an Early Warning System that would help determine the optimal limit of the following factors of bureaucratization: hierarchy, impersonality, formalization, and specialization. Consequently, it will be the basis for simplification of the business licensing system.
The study examined procedure, cost, and time variables that affect business-licensing processes in Indonesia, based on surveys administered by the World Bank, Asia Foundation, and the Regional Autonomy Watch (KPPOD). The study found that the licensing system in Indonesia is extremely formalized and specialized, leading to further problems such as overlapping guidelines, partial delegation of authority, and delays due to dependence between tasks and procedures. The study also noted the lack of IT utilization and lack of professionalism of human resources (HR). From these findings, Syafiq and Auliya recommended clear delegation of authority, capacity building for HR, and synchronization of licensing guidelines. They also suggested the full use of IT tools for simplifying business licensing.
The Carlos P. Ramos Award for Best Conference Paper began this year to recognize excellent papers presented in annual EROPA Conferences. It also hopes to draw more quality paper submissions for the conference and for possible publication in academic journals such as ARPA. The Award consists of a certificate and a USD1,000 cash award.