Indonesia is the biggest economy in southeast Asia and has the fourth largest population in the world. It is an archipelago of more than 13,500 islands and highly decentralised with 33 provinces, writes Prince Michael of Liechtenstein.
Indonesia's curse is an overbearing bureaucracy with a maze of regulations. This was created by an excessive level of corruption which has become entrenched through an established political elite over several generations and different regimes.
The result is that Indonesia ranks low on the World Bank’s ease of doing business index. This is a problem for investment and reflects unsatisfactorily in the economy.
An outsider, Joko Widodo known as Jokowi, was elected in the July 2014 presidential election. He was a successful businessman before becoming governor of Jakarta. He has no record of corruption and was elected on his promise to fight corruption.
Jokowi now has to deliver. His problem is that he lacks a parliamentary majority and the roots of much of the excessive bureaucracy and regulations lie in the authority of the provinces which the president cannot tackle.
This is a dilemma. Jokowi intends to address it by creating competition between the provinces. Such a system could mean the provinces easing the burdens of bureaucracy and reducing the size of the administration to avoid corruption and be more business-friendly.
Experience shows that reducing the size of the administration, and having fewer but efficient rules, is the best way of beating corruption. Georgia is an excellent example of this.
We can only hope that Jokowi is successful with his ambitious plan.
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