JAKARTA: Indonesia's efforts to become one of the world's largest economies are increasingly paying off. This is demonstrated by the rise of Indonesia's competitiveness ranking by seven places in 2024, the highest in the past six years.
In the Institute for Management Development (IMD) World Competitiveness Ranking (WCR) 2024, Indonesia ranks 27th out of 67 countries compared to 34th in 2023.
In South-East Asia, Indonesia's competitiveness has entered the top three, following Singapore and Thailand.
"This is a concrete manifestation of the government's efforts to improve the ease of doing business and to create a good investment climate for investors through the implementation of the Job Creation Law," said Coordinating Economic Minister Airlangga Hartarto (pic).
The rise in the competitiveness ranking is supported by improvements in business efficiency (from 20th to 14th place), government efficiency (from 31st to 23rd place) and economic performance (from 29th to 24th place).
However, Indonesia must continue to focus on improving infrastructure.
In detail, some factors that have driven improvements in business efficiency include the availability of labour (ranked 2nd), corporate management (ranked 10th) and societal behaviour (ranked 12th).
Furthermore, the improvement in government efficiency, which rose by eight places, is partly due to the government's efforts in business legislation, which improved from 49th place in 2023 to 42nd place in 2024.
The increase in economic performance is mainly driven by the strength of the domestic economy (ranked 10th) and maintained price levels (ranked 12th). According to data from Statistics Indonesia (BPS), Indonesia's economic growth in Q1-2024 increased by 5.11 per cent year on year (yoy), compared to the previous quarter's growth of 5.04 per cent yoy.
A country's rise in the competitiveness ranking certainly has significant effects, particularly on investor attractiveness. A high competitiveness ranking enhances a country's reputation and positive image in the eyes of global investors, who often consider these rankings in their investment decisions.
Additionally, a higher competitiveness ranking will increase investor confidence in a country's economic stability and growth potential. - The Jakarta Post/ANN
