Trade Ministry enters new world of electronic licensing

Andi Haswidi, The Jakarta Post, Jakarta

With a view to improving the business climate and competitiveness, the Trade Ministry launched a new trade facilitation unit Friday that should lead to more transparent, fast and efficient licensing procedures.

The ministry says the launch of the new unit is a step toward the establishment of a fully fledged computerized system for the issuance of trade-related permits. This would reduce dependency on manual and redundant procedures that only served to impair the country's global competitiveness.

Trade Minister Mari Elka Pangestu said that all licensing procedures would be capable of being carried out more quickly through the computerized system to be established by the unit.

"As an example, the issuance of a trading permit (SIUP) used to take 10 days. But we will now be able to do it in between three and five days," Mari said, implying that the issuance of other types of permits would be similarly accelerated.

"The bottom line is that we need to reduce the high cost of doing business here," she stressed.

Indonesia is trying to keep up with other developing countries in improving its business climate and increasing its global competitiveness through providing quicker licensing procedures.

The World Economic Forum's global competitiveness index reveals that of the 107 countries surveyed in 2006, Indonesia ranked 50th, an improvement from 60th place in 2005, but still far behind Malaysia in 26th place, and Singapore in 5th place.

The Trade Facilitation Unit, which is located on the first floor of the Trade Ministry's headquarters, is designed to serve as a one-stop shop where the public can access information and services related to all trade-related licenses, including export and import permits. The unit will provide its services free of charge, and similar units are also to be established at the regency/municipality level.

The unit will conduct trials on its computerized licensing system, which will be capable of being accessed through the Internet, up until the end of May. Currently, there are 50 license applicants waiting to take part in the trials.

The end of the trials will be followed by a second stage involving tryouts on the e-licensing system. These tryouts will be held from June until the end of August, after which a fully fledged e-licensing system will be introduced in December.

The new initiative involves not only computerization, but also the simplification of existing Trade Ministry regulations.

"We have reduced the number of trade-related regulations from 77 to about 60," Mari said.

She also said that the streamlining process, which has been underway since 2005, would continue so as to further fine tune the licensing regime.

Early in 2006, the Trade Ministry abolished two regulations requiring licenses for the establishment of trade associations, transferred responsibility for the licensing of appraisal firms to the Finance Ministry, and relaxed two regulations on forestry-related export commodities.
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