Latest report of World Economic Forum (WEF), Global Competitiveness Report 2013-2014, revealed that Indonesia is a country with a quite fantastic increase in competitiveness ranking. According to the WEF report, Indonesia’s competitiveness ranking is now on the 38th position in the world, an increase of 12 ranks from a year earlier at 50th position. In the report, WEF said that after three years of decline, Indonesia improved and was listed as a country with the biggest growth this year.
Cabinet Secretary, Dipo Alam, in Jakarta (Friday, September 6), explained that the performance achievement shows that the policies, programs, and directions of development conducted by the government so far has been true and correct. So it receives appreciation from investors and business community surveyed by WEF. According to him, the decline in Rupiah exchange rate was a global volatility, which is not only felt by Indonesia but also occurred in other countries. “Our competitiveness ranking increased, but one thing which is no less important is to maintain the trust of investors and the business here”, he said.
He said that one of the factors that indicate the increase is improvement in infrastructure sector which includes road infrastructure, the quality of railway transportation, port and air transportation. Indonesia’s infrastructure score, he said, in 2008 only reached 3. Then in 2009 rose to 3.2, increased to 3.6 in 2010, and reached 3.8 in 2011. Even though it fell to 3.7 in 2012, this year infrastructure score strengthen to 4.2.
According to him, Indonesia is not yet able to occupy the Top 10 position which is occupied by Switzerland, Singapore, Finland. Even so, he said, there are many other countries which experienced decrease in competitiveness level. Introduced by World Economic Forum in 2004, the Global Competitiveness Report is based on the Global Competitiveness Index (GCI) which indicates the economic competitiveness of a country based on institutional performance, policies and factors that determine the productivity level of a country.
GCI score is calculated by collecting country level data covering 12 categories/pillars of competitiveness, namely institutions; infrastructures; macroeconomic environment, health and elementary education; higher education and training; market efficiency; labor market efficiency; financial market development; technological preparedness; market size; business sophistication; and innovation.
Competitiveness should be a serious concern of all shareholders. Otherwise, the Indonesian economy will be less than its neighboring countries. For example, beyond economists’ predictions, the development of the Philippines’ economy showed impressive result. The Philippines achieved the fastest growth target at 7.8% in the first quarter of 2013, with the support of positive momentum.
The positive momentum occurred with the Philippines government policies that encourage consumption, investment and government spending. Compared to Indonesia’s economic growth, it is equally positive. Target of Indonesia’s economic growth (GDP) this year is at 6.3%. This projection is relatively the same with the average growth in the Philippines when seen from the growing complexity of Indonesian economic growth.
Of course, the government did not remain silent to maintain the competitiveness of this country. One of the attempts is through fuel subsidy budget policies which will be diverted to infrastructure improvement. The government’s commitment to focus on infrastructure improvement is to maintain the country’s level of competitiveness. Indonesia should also anticipate earlier, so that this nation does not just play a role as a potential market in the ASEAN Economic Community.
Business News - September 11, 2013