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An Examination of Government Bureaucracy in Facilitating Business: Comparing Malaysia with Indonesia


Endi Haryono*
Samihah Khalil
College of Law, Government and International Studies, Universiti Utara Malaysia

*Corresponding author; email: endi@uum.edu.my / haryono_endi@yahoo.com



Government of today must facilitate business activities and promote efficient policies to smoothen the processes of doing business. The Global Competitiveness Report 2010-2011 has listed inefficient government bureaucracy as top most problematic factor experienced by businesses in Malaysia and Indonesia. Despite immense efforts being taken by both governments to improve this negative image, bureaucracy efficiency rankings are still poor. Both Malaysia and Indonesia are gearing up systematic reform to raise efficiency of government machinery via combating corruption and red tape. This paper begins with a brief discussion on bureaucracy efficiency and its link with business growth from the perspective of three performance ranking reports which review Malaysia and Indonesia’s recent performance years. A comparative note is presented to review what rankings and scores and how these dwindling positions reflect bureaucracy performance. The paper examines political and administration changes which contribute to low score of government machinery despite sound transformation policy for Malaysia and corruption initiatives for Indonesia. The study analyses Global Competitiveness Report, World Bank Doing Business report and Political and Economic Risk Consultancy Survey from 2008 to 2011 for Malaysia and Indonesia in order to portray the ranking and score of Malaysia and Indonesia bureaucracy. The annual report of Government Linked Companies (GLCs), auditing firms and government budget speeches of Malaysia were examined to find evidence for bureaucracy performance in Malaysia. In order to encompass a wider picture of the corruption in Indonesia, media source is taken as its main source. Ranking and score of analyses Global Competitiveness Report, World Bank Doing Business report and Political and Economic Risk Consultancy Survey are presented in tabular format followed by a discussion of the results. Textual analysis is performed on annual reports, budget speeches and media reports information and findings gathered from these sources are narrated to offer a perspective of the policy in Malaysia and corruption in Indonesia.

Keywords: government, bureaucracy, Global Competitiveness, corruption