UK provides funds for regulatory reforms in RI

By : Norman Harsono



The United Kingdom has agreed to provide financial assistance to support Indonesia’s regulatory reform programs.

The Office of the Coordinating Economic Minister has inked a memorandum of understanding (MoU) on financial assistance with the British Embassy in Jakarta.

Ministerial secretary Susiwijono Moegiarso told reporters that the UK government – specifically the Foreign Office – had earmarked 1.14 million pounds (US$1.45 million) for the five-year cooperation, expected to end in March 2023.

Most of the funds, sourced from the UK’s development assistance funds, will be used to bring in British governance experts who will share knowledge with Indonesian government officials. This may be done through seminars, workshops and conferences, among other training formats.

Dennis Ager, a regulation specialist with the UK’s Business, Energy and Industrial Strategy Ministry, is one of the experts flown in to Indonesia. He led a workshop in Jakarta on Tuesday on engaging businesses and effectively implementing regulations.

“That includes designing policies well [and] working with officials and businesses to implement them. And evaluating their impact to see whether [they work] will,” he told The Jakarta Post.

“In our ministry, we have forums where we bring businesses together to seek their views. What are their priorities? What do they think will help them continue to grow and thrive?”

The MoU is an expression of Coordinating Economic Minister Darmin nasution’s commitment to regulatory reform, which entails changing regulations are made and changing how regulations are implemented.

The minister announced the commitment in June after Indonesia rose by 11 ranks on the 20189 International Institute for Management Development’s (IMD) World Competitiveness Ranking. Out of 63 economies, Indonesia ranked 32nd in this year’s IMD index, up from 43rd in the last year’s. But the minister still deems reform necessary, as the country’s performance was poorer that of Southeast Asian neighbors Thailand (25th place) and Malaysia (22nd).

Uk Ambassador to Indonesia Moazzam Malik said his government and Indonesia had so far agreed upon sharing knowledge in three “packages” : developing consumer protection laws, implementing regulatory reform and engaging businesses in reform.

“Regulations need to be implemented such that markets can function effectively and, thus, grow the economy and create jobs. Good regulations establish a government that can stimulate startups, increase investment and protect consumers,” he said in a statement.

The UK expects its support for Indonesia to return the world’s 16th largest economy into an outward-looking market, which openly trades goods and accepts foreign investment, particularly from the UK.

Trade between the UK and Indonesia was valued at $2.68 billion in 2018, while British investment to Indonesia amounted to #271 million. The latter figure makes the UK Indonesia’s 14th largest investor.

Ambassador Malik added that the UK had the credentials to train Indonesian officials on regulatory reform, as the country ranked “top overall” out of 38 countries surveyed for the 2019 International Civil Service Effectiveness (InCiSE) index.

The INCise index ranks the UK first in regulation quality and among the top five in human resource management, financial management, tax administration, policy-making, openness and procurement. It is among the top ten in staff capabilities, but 14th and 27th in inclusiveness and digital service, respectively.

The UK’s shortcoming in inclusivity and digitalization may pose limitations for what can be learned from the country, as Indonesia’s government strives for economic equalization between its regions and for growth of the digital economy.

Nevertheless, Susiwijono said that, looking forward, the Office of the Coordinating Economic Minister wanted to collaborate with the UK on improving Indonesia’s investment climate and its Online Single Submission (OSS) business licensing system.