Regional Regulations and Their Impact on Business Climate

Policy Research

In the past decade Indonesia has witnessed efforts to bring together decentralization and a good business climate. There is no doubt that bringing investment into a region is one of the main challenges local governments have had to face. In exercising the authority entrusted to them through decentralization, local governments have to walk a tight line and strive to strike a balance between short-term interests and the long-term sustainability of their region. Some say that the latter has been severely overshadowed in favor of the former.

These are some of the issues that came up in The SMERU Research Institute’s recent study of the business climate in East Nusa Tenggara, which was supported by Antara-AusAid. In its second study of the business climate in this region, SMERU examined three kabupaten/kota: Kota Kupang, Kabupaten Timor Tengah Utara, and Kabupaten Flores Timur, and looked specifically at local regulations and their practices.

The notion of regional autonomy suggests that local regulations and their implementation will facilitate a conducive business climate that attracts investment, creates employment, and reduces poverty. However, SMERU’s findings show that the situation on the ground is at odds with this idea. Against this background, guest writer, Robert Endi Jaweng, shares his views on how a recently enacted regulation may potentially contribute to a friendlier business environment in Indonesia.

On a different note, our NGO guest writer, Vincent Bureni of Bengkel APPeK describes the strategies adopted by women in small businesses in Kupang in their quest for a better life.

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Palmira Permata Bachtiar
M. Sulton Mawardi
Deswanto Marbun
Robert Endi Jaweng
Vincent Bureni
Deswanto Marbun
Robert Endi Jaweng
Vincent Bureni
Research Area 
East Nusa Tenggara
business climate
regional regulations
business regulations
Publication Type 
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