Improving the Business Environment

Indonesia climbs up global competitiveness ladder: WEF report

By Sarah Yuniarni and Tabita Diela
Wednesday, September 27, 2017

Indonesia's competitiveness has improved over the past year, on the back of the country's large market, robust macroeconomic environment and notable efforts to improve business sophistication, according to a report by the World Economic Forum, published on Wednesday (27/09).

The Global Competitiveness Report 2017-2018 rates Indonesia as the world's 36th most competitive economy among 137 nations, with the country having improved five places from a year earlier. Indonesia took the place of Poland, which slipped to 39th spot on this year's list.

"Indonesia is inching its way up the competitiveness ladder [...] Indonesia improved its performance across all of its pillars," the report says.

The Global Competitiveness Index weighs each country's competitiveness based on 12 pillars, that include a country's institutions, policies and factors that determine the level of productivity. The latter also determines a country's prosperity potential.

Indonesia maintains its record as one of the top performers in terms of market size, macroeconomic stability, innovation and financial market development.

The country is considered one of the top innovators among emerging economies. However, it is also worth mentioning that the country is "lagging quite far behind" in terms of technological readiness and labor market efficiency due to overlapping costs, limited wage flexibility and low participation by women in the labor force.

The latest edition of the Global Competitiveness Report also features businesses' opinions on the most problematic factors for doing business in the country. According to the survey, corruption, inefficient government bureaucracy, limited access to financing, inadequate infrastructure and policy instability are the most concerning aspects.

This year's result is slightly different from last year's, when inflation was among the five most problematic factors.

The 2017 edition of the executive opinion survey is based on the views of 14,375 business executives in 148 economies and it was undertaken between February and June this year. Only 12,775 responses from people in 133 economies have been retained. This year's survey includes the views of 94 respondents from Indonesia, compared with 86 last year.

This article first appeared on the Jakarta Globe's website on September 27, 2017.

Usage of the AmCham Indonesia website states your compliance of our Terms of Use