Indonesia Rises 7 Levels to 27th Place in IMD World Competitiveness 2024, Surpassing the UK and Japan

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A surge of optimism is sweeping through the Indonesian government as the country’s competitiveness ranking jumps seven places to 27th in the IMD World Competitiveness 2024 report. This remarkable rise displaces Malaysia’s position from the previous year and places Indonesia ahead of several major economies.

Indonesia’s advancement doesn’t stop at surpassing Malaysia; it also ranks higher than the UK, Japan, and India. Meanwhile, Singapore has secured the top spot among the 67 countries evaluated.

The Institute for Management Development (IMD) attributes this improvement to significant strides in several key areas. Business Efficiency saw an improvement from 20th to 14th place, Government Efficiency climbed from 31st to 23rd, and Economic Performance rose from 29th to 24th.

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Arturo Bris, Director of the IMD World Competitiveness Center (WCC), highlighted Indonesia’s remarkable progress. “Indonesia has not only moved up from 34th place last year but is also in the top three in Southeast Asia, following Singapore and Thailand,” Bris noted in an official statement on Tuesday (18/6/2024).

“Indonesia’s competitiveness is driven by enhanced economic performance, capital attraction capabilities, and GDP growth. This year, Southeast Asia has shown strong economic performance, with the exception of Malaysia, which has seen a decline in ranking,” Bris elaborated.

Despite these achievements, Indonesia still faces challenges in infrastructure, where its ranking dropped one position to 52nd.

Coordinating Minister for Economic Affairs, Airlangga Hartarto, acknowledged the infrastructure sector’s challenges but emphasized the positive impact of the increased competitiveness on investor attraction. “A higher competitiveness ranking boosts investor confidence in the country’s economic stability and growth potential,” Hartarto stated on Thursday (19/6/2024).

Investment trends have mirrored this newfound optimism. By the end of the first quarter of 2024, investment realization had reached IDR 401.5 trillion, marking a 22.1% year-on-year increase. Foreign capital alone grew by 15.5% year-on-year, amounting to IDR 204.4 trillion.

The government remains committed to improving the investment climate to facilitate easier business operations for investors. Current efforts include regulatory improvements through the Job Creation Law and its derivative, Government Regulation (PP) No. 5/2021 on Risk-Based Business Licensing. Hartarto also emphasized ongoing enhancements to services via the Online Single Submission (OSS) System.

“The higher competitiveness ranking significantly enhances investor confidence, signaling a stable economic environment and promising growth prospects,” Hartarto reiterated. The government’s dedication to regulatory reforms and service improvements aims to sustain and build on this positive trend, ensuring that Indonesia remains an attractive destination for global investors.

Gaining 27th in the IMD World Competitiveness 2024 report, continued focus on infrastructure development and regulatory reforms is recommended. These efforts will enhance Indonesia’s attractiveness for investors and foster economic stability and growth.