Promoting Evidence-Based Approach For Better Business Regulations


From February 3 – 5, 2021, twenty technical staff from the Office of the Deputy of Micro Enterprises (formerly the Business Restructuring Unit) of the Indonesian Ministry of Cooperatives and Small-Medium Enterprises (SME) participated in a business regulations capacity building program. Facilitated by the USAID funded Economic Growth Support Activity (EGSA) project, this event aimed to promote the use Regulatory Impact Assessment (RIA) tools and frameworks to ensure the quality of regulations.

RIA provides a systematic approach to assess the effects of regulations before they are passed or promulgated. It is an important element of an evidence-based approach to policy making and can underpin the government’s capacity to ensure proper design and establishment of business-friendly regulations.

One of the training participants, Ms. Erni Suryaningrum, is a Policy Analyst who stated that the training unlocked new skills that will enhance her job performance. “The use of RIA has particular importance as a systematic mechanism for assessing the estimated benefits of proposed regulations so that they will create an enabling environment for the stakeholders.” She further acknowledged that a successful RIA application will help the Indonesian government officials to perform better in the design and promotion of business regulations.

The Office of the Deputy of Micro Enterprises plans to adopt a rapid RIA as part of its efforts to inform policy and program design, which will help micro enterprises to comply with the government’s new risk-based licensing standards and requirements and increase business formalization and scale-up.

Furthermore, the Ministry of Cooperatives and SMEs is considering a pilot adoption of the RIA at the subnational level in East Java and South Sulawesi provinces as part of the Integrated Business Service Centers for MSMEs (PLUT-KUMKM). The adoption in other USAID/Indonesia priority provinces such as DKI Jakarta and West Kalimantan are planned in 2022.

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