Indonesia has jumped four places in the World Economic Forum’s Global Competitiveness Index 2014-2015. In the latest edition Southeast Asia’s largest economy is ranked 34th (from 38th in last year’s edition of the index). Since the 2012-2013 edition, when Indonesia was ranked 50th, the country has risen steadily. The Global Competitiveness Index measures the institutions, policies, as well as factors that set the sustainable current and medium-term levels of economic prosperity among 144 countries around the world.
According to the World Economic Forum, which releases the Global Competitiveness Index on an annual basis, the six most problematic factors for doing business in Indonesia are corruption, access to financing, inflation, inefficient government bureaucracy, inadequate supply of infrastructure, and policy instability.
Economist Tony Prasetiantono said that Indonesia’s competitiveness has improved mainly because of sharp rupiah depreciation that occurred in the second half of 2013. Indonesia’s currency lost about one-fifth of its value against the US dollar during that period, making its exports more competitive.
The table below shows the world’s top five most competitive countries based on the Global Competitiveness Index as well as Indonesia and several neighbouring countries in the Southeast Asian region. It also shows that Indonesia still lags behind some of its regional peers.
Source: Global Competitiveness Index 2014-2015