Ease in E-business start-up: New Zealand's lesson to learn

Duncan Graham, Contributor The Jakarta Post, Surabaya

News that Indonesian public servants are resisting the introduction of electronic business transactions known as e-government should not surprise anyone familiar with similar systems overseas.

The benefits to the consumer are huge; the downside for the bureaucrat is just as large. Once e-government processes are installed correctly pen pushers become redundant. Also forfeited are the opportunities for pocketing extra fees.

E-government came to Indonesia with a 2001 Presidential instruction on Telematica, meaning telecommunication, media and information. It was supposed to put citizens on-line to access services; not to keep them waiting in line.

According to an ASEAN review only 23 of 265 regencies in the country have "prepared" e-government networks. In many cases these are just websites that may or may not get regularly updated.

Six years on, Djoko Agung Harijadi, the boss of e-government, has reportedly said the public service isn't ready for the system, citing 'resistance' and 'a lack of awareness.'

One of the best examples of how e-government works can be found in New Zealand (NZ). This country ranks equal first alongside Denmark and Finland as the world's number one cleanskin in Transparency International's corruption perception index.

Indonesia comes in at 143 along with Gambia and Russia.

One reason for NZ's favorable rating has to be the widespread use of e-government, which removes any chance for corrupt public servants to milk the system or treat their fellow citizens with contempt.

Indonesia ranks 123 on the World Bank's list of countries based on ease in doing business. NZ comes in second place, just behind Singapore. It takes around six months to start a business in Indonesia. In NZ it takes just one day.

Registration can be done from home or the office -- anywhere with an Internet connection. A printer and scanner are also required. The only other physical requirements are a reasonable level of English and a credit card.

It works like this:

The potential businessperson (and it can be an Indonesian citizen) checks the registry of NZ business names on the Internet to ensure his or her business name choice hasn't already been taken.

If there's no exact or similar match the new name (let's call it Golden Futures Limited) is reserved for 28 days for a fee of NZ $10 (Rp 70,000), which can be paid by credit card transaction.

This takes about five minutes and confirmation of business name and company number is e-mailed back to the client. No problems arise unless the Registrar recognizes that you've chosen a name too similar to that of an existing company. No Nescafi or McDanolds, thank you.

You then have a month to turn Golden Futures Limited's engagement into a marriage. All the forms and instructions to register the company are on the Internet (www.companies.govt.nz) and are written in plain English.

You need to download the "consent of shareholder" and "consent of director" forms and give these to the respective individuals to sign. These people do not have to be NZ citizens and can use their Indonesian addresses. KTP (identity cards), KK (family cards) and letters from the Rukun Tetangga (community head), police, banks and employers -- or anyone else for that matter -- are not required.

Once this has been done the forms can be scanned and uploaded to the NZ Companies Office.

The only catch for people living overseas is they must provide a NZ address as the company's registered place of business. Post office boxes aren't allowed so you need to find a friend in NZ who will allow you to use his or her address for serving any hard-copy correspondence, though in fact most communication is via e-mail.

Provided you've filled in all the boxes correctly, paid the total fee of NZ $150 (Rp 1 million) and are not banned from being a company director through a prior fraud conviction, Golden Futures Limited will be a legal entity within one working day.

As Indonesia is five hours behind NZ it pays to lodge the documents during the night.

Maybe there's a public servant sitting in some neon-saturated Companies Office cubicle watching your forms and signatures flash across the screen.

If so, she or he doesn't communicate well; if you fail to tick the right box a curt red message zips back telling you to try again. As Kiwis are generally polite, you're probably dealing with a machine. No wonder Indonesian bureaucrats fear the mouse-clicks of progress.

One other catch for overseas applicants; you don't need an Internal Revenue Department (IRD) number (known elsewhere as a tax file number or in Indonesia as a Nomor Pokok Wajib Pajak), but without it you'll be hit by the top tax rate.

Unfortunately, the IRD hasn't streamlined its processes to the Companies Office level of sophistication. The forms can be downloaded, there's no fee, but completed applications have to be returned by mail. For anyone living in Indonesia that's not always a fast or secure service.

You can communicate with the IRD through e-mail, but you have to register first so privacy can be preserved. But to register you must have an IRD. This is the e-version of the chicken and egg riddle.

No doubt a computer will find a solution.