Indonesia competitiveness leaps, leaves RP far behind

Vienna — Indonesia, a country which used to below the Philippines in being a site for business, has made the most progress in terms of competitiveness in recent years, but major challenges remain, the World Economic Forum said yesterday.

In the WEF’s first-ever Indonesia Competitiveness Report, released ahead of the 20th World Economic Forum on East Asia in Jakarta this weekend, the organization found that Indonesia showed the strongest progress among the G20.

“Indonesia ranks 44th among 139 economies in the Global Competitiveness Index or GCI ranking,” the report said.

Within the Association of Southeast Asian Nations (Asean ) group of countries, while Indonesia was still well behind Singapore and Malaysia, it was at par with Thailand and Vietnam, but “far ahead” of the Philippines and Cambodia.

Since 2005, it had progressed in each of 12 categories of the index and “now compares favorably” with Brazil, Russia, India and South Africa.

“From an economic standpoint, Indonesia has done remarkably well in the past decade and has proven very resilient during the global economic crisis,” WEF economist and the report’s author, Thierry Geiger, said.

“These positive developments are, to a large extent, reflected in the country’s competitiveness performance. Indonesia should not be complacent, though. Many shortcomings persist and robust growth might exacerbate them,” Geiger said.

Infrastructure was “among the most glaring shortcomings,” the expert said.

“Ports, roads and railroads are in poor condition. Electricity supply is extremely unreliable and scarce,” he said.

The uptake of information and communication technologies was still limited, both among businesses and within the population at large.

The public health situation was “alarming” and the rigidity of the labor market meant that informal employment and precarious working conditions were prevalent.

Finally, Indonesia “must continue strengthening its institutional framework. Corruption remains widespread, while greater transparency and predictability are needed in the policy-making process,” the WEF said.

“Indonesia’s ranking has improved remarkably as cited in the report,” said the country’s trade minister, Mari Elka Pangestu.

“However, we recognize the need to continue improving our competitiveness and the government has prioritized overcoming these challenges, especially infrastructure bottlenecks,” Pangestu said.

“We also recognize the need to improve human resources by continuously improving health, education and workers’ training,” the minister added. AFP