IFC PENSA PROMOTES SUB NATIONAL DEREGULATION

Contact:
Nia Sarinastiti
Communication Officer IFC-PENSA
Phone : 021 52993134
Fax : 021 52993141
Cell : 0811 856 556
Email: nsarinastiti@ifc.org
Jakarta, April 1, 2005 – The International Finance Corporation’s Program for Eastern Indonesia SME Assistance (IFC-PENSA) today signed memoranda of understanding with the Association of Indonesian Municipal Governments (APEKSI) and the Indonesian Regencies Cooperation Body (BKKSI) designed to promote sub national deregulation in Indonesia and increase the capacity of local government to implement that program.

The World Bank Group’s Private Sector Development Vice President, Michael Klein, who is visiting Indonesia to promote investment climate reform, witnessed the signing. "These agreements mark the first step toward better business registration and licensing processes, in particular. This is an important step toward improving the Indonesian investment climate,” said Klein. “Working with APEKSI and BKKSI will not only offer best practices but also strengthen their knowledge and services they provide to local government members.”

IFC-PENSA General Manager Chris Richards said: “Our deregulation initiative under the Business Enabling Environment Program creates the opportunity for informal businesses in regencies and municipalities to become better established small and medium sized enterprises. With this base, we can help them gain access to finance or link their services to larger companies.”

In the sub national deregulation program, IFC PENSA will improve local government efficiency by helping reform administrative procedures impeding business development such as business registration and licensing services, improving internal control systems, and establishing more effective customer feedback processes. IFC PENSA will implement the program with selected consultants and the World Bank’s Foreign Investment Advisory Services (FIAS), which has more than 20 years of global experience in investment policy.

“Today’s agreement begins the transfer of knowledge, experience, and best practices from IFC-PENSA and FIAS to more regencies and municipalities,” said Business Enabling Environment Program Manager Hans Shrader. “This program will not only provide efficient processes but also strengthen the associations’ ability to support deregulation over the long term.”

APEKSI Executive Director Sarimun Hadisaputra said: “We feel that this partnership supports our organization’s objectives to provide policy advice and facilitate cooperation among members, the private sector and international organizations.” He continued, ”We hope that by implementing the program, cities in Indonesia can absorb best practices, and therefore members will be able to exchange program on how to serve the public.”

BKKSI Executive Director Syarifuddin Lubis noted that international organizations would provide credibility to the regency’s effort in developing policies for businesses. “Businesses will recognize the seriousness of the local governments’ efforts to create a better business climate,” he said. ”In the future we would not need to worry on how slow the local government builds partnership with the business community.”
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APEKSI and BKKSI are non-profit organizations established in May 2000, based on the Ministry of Home Affairs Decree No. 16/2000 with the ultimate goals of encouraging regional autonomy implementation and improving the people’s welfare as well as to maintain the unity of the nation towards realization of the national objectives in the 1945 Constitution. APEKSI has 92 members and BKKSI has 348 members all over Indonesia. About 40 percent are in eastern Indonesia. BKKSI was formerly known as APKASI.

PENSA is IFC’s technical assistance facility supporting small and medium enterprise development in Eastern Indonesia. IFC is the private sector arm of the World Bank Group. The PENSA facility has a five-year mandate and has been co-funded by IFC, the Australian, Canadian, Japanese, Swiss and Netherlands governments, and the Asian Development Bank with initial funding commitments of $23 million.