INASIA

Insights and Analysis

From Indonesia: Taking Transparency to New Heights

August 8, 2007

By V. Bruce J. Tolentino

Recently, on a visit to the town of Cimahi in Western Java, Indonesia, The Asia Foundation’s economic experts met Pak Itoj Tochija, Cimahi’s Mayor. He was eager to show us their One Stop Shop (OSS): an initiative that facilitates the growth of small and medium businesses by vastly decreasing the time and cost of obtaining licenses and permits. The “shop” now has behind one door several offices of local bureaucracy that hold decision-making authority in the opening and operation of a business.

“Welcome, welcome” cried Mayor Itoj as he ushered the visitors into the main conference room of Cimahi’s town hall, whereupon a live band filled the air with happy music. All gathered around a large buffet laden with Indonesian sweets.

Mayor Itoj launched into a spirited powerpoint presentation on the history of the Cimahi OSS and how his administration had entered into a partnership with The Asia Foundation to adopt the OSS as an innovation to promote enterprises and decrease corruption.

As one of the most highly regulated countries in the world in terms of time and cost of obtaining a business license — as deemed by the “Doing Business Index” of the International Finance Corporation — the OSS initiative is a major stepping stone towards reforming regulations related to private enterprise in Indonesia. Through the OSS, local and national governments can resolve regulatory issues in a more transparent and inclusive way, yielding to improved national legislation and policy towards business regulation.

To organize the Cimahi OSS, The Asia Foundation provided technical assistance and training through an NGO partner, while Cimahi’s local government financed all capital costs and operations.

Mayor Itoj said he’d carefully selected Cimahi’s OSS staff using psychological screening to find those with the “right” attitudes, and added that the staff members were young and still “unpolluted” by corruption. To maintain their pristine state, Mayor Itoj decreed that the OSS staff would receive 50% premia on their regular municipal salaries. Then, the Mayor led us over to tour the One Stop Shop. It is an impressive, newly-built, modern extension to the ground floor of the Municipal Hall, and is laid out like a bank, with marble-like floors and counters and alert, uniformed staff. The walls had many posters with instructions and other information on business licenses, fees, and procedures.

“Look up,” Mayor Itoj urged the visitors. Above was a transparent, plexiglass ceiling through which all activities in the OSS could be observed from the upper hallways of the Municipal Hall. “The transparent ceiling helps ensure that all activities in the OSS are open and aboveboard,” the Mayor declared, adding that the ceiling symbolizes his government’s commitment to good governance.

The Cimahi One Stop Shop is one of 62 that have received The Asia Foundation’s support. Now that the OSS’s are established, a new phase of monitoring and evaluation of the shops will begin. The OSS program is a key feature of The Asia Foundation’s economic reform and development programming, in addition to the promotion of private sector development, regulatory impact assessment, trade liberalization, and other pro-poor development interventions.

Dr. Tolentino is the Director of The Asia Foundation’s Economic Reform and Development Programs.

Related locations: Indonesia
Related programs: Economic Opportunity

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