Low business competitiveness hampering economic growth<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Instead of boasting so much about the current macroeconomic
\nstability, the government should turn its focus on improving
\nbusiness competitiveness in the country in order to generate
\nhigher economic growth, a respected think thank has said.<\/p>\n
The Institute for the Development of Economics and Finance
\n(Indef) said that business competitiveness here was among the
\nlowest in the world.<\/p>\n
\"Improvement in macroeconomic indicators have yet to form the
\nbasis for economic recovery,\" it said last week when announcing
\nits latest study on business competitiveness.<\/p>\n
Indef said that after securing a stable exchange rate of the
\nrupiah and a benign inflation environment, the government must
\nspeed up efforts to resolve problems faced by the corporate
\nsector and foreign investors.<\/p>\n
It said that the poor business competitiveness was one of the
\nmain reasons for the country's weak performance in export and
\ninvestment, seen as key elements for generating solid economic
\ngrowth.<\/p>\n
Quoting various international surveys, Indef said Indonesia's
\neconomy was ranked among the lowest in the world in terms of
\ncompetitiveness and has gotten worse.<\/p>\n
Indef cited six indicators that have weakened the country's
\ncompetitiveness on the global level.<\/p>\n
There is a lack of up-to-date technology in the manufacturing
\nindustry, insufficient infrastructure, weak law enforcement, a
\nlack of effectiveness and transparency in the government's
\npolicies, weak implementation of good corporate governance
\nprinciples and high risks with regard to economic and political
\nstability.<\/p>\n
All of which have added to the problems in the country's
\nmicroeconomy, already regarded as less competitive compared to
\nmost others, mainly because of all the extra costs in doing
\nbusiness here.<\/p>\n
Aside from rampant illegal fees from corrupt officials, Indef
\nhighlighted a survey suggesting that higher business costs in
\nIndonesia, were caused also by inefficiency.<\/p>\n
Indef pointed out, as an example, the higher cost of an
\ninternational telephone call, as compared to Malaysia, Singapore
\nand South Korea.<\/p>\n
Indef said that if the above factors did not improve,
\nIndonesia would never experience the type of economic growth that
\nis not only sustainable, but also at a high enough level to
\nreduce unemployment and poverty.<\/p>\n
\"If we keep growing by just 3 percent to 4 percent per year,
\nwe will only absorb some 1.2 million new workers a year, and
\nleave the remainder of around 1.3 million jobless each year,\"
\nIndef said.<\/p>\n
In its conclusion, Indef proposed a number of measures that
\nthe government could do to change the current situation for the
\nbetter.<\/p>\n
They include: focusing on the development of the agribusiness
\nsector and other natural resource-based industries, the
\ndevelopment of high value-added trade and industry sectors,
\nrevitalization of infrastructure, speeding up the restructuring
\nof the weak banking industry, and creating more effective
\nregional administrations.<\/p>\n
Macroeconomy competitiveness 2002
\n_________________________________________________
\nCountry Growth Technology Public<\/p>\n
Competitiveness Institution
\n_________________________________________________<\/p>\n
Malaysia 27 26 33
\nThailand 31 41 39
\nChina 33 63 38
\nIndia 48 57 59
\nPhilippines 61 52 70
\nArgentina 63 44 66
\nViet Nam 65 68 62
\nIndonesia 67 65 77
\nNigeria 71 71 78
\nBangladesh 74 79 79
\n---------------------------------------------------
\nSource: World Economic Forum, Indef, 2003<\/p>\n
Microeconomy Competitiveness 2002
\n_______________________________________________________________________
\nContry Microeconomic Company Quality of National<\/p>\n
Competitiveness Operations BusinessEnvironment<\/p>\n
& Strategy
\n________________________________________________________________________
\nMalaysia 26 27 26
\nThailand 35 33 35
\nIndia 37 40 37
\nChina 38 38 38
\nViet Nam 60 67 58
\nPhilippines 61 49 67
\nIndonesia 64 65 68
\nArgentina 65 57 68
\nNigeria 71 71 71
\nBangladesh 74 76 74
\n------------------------------------------------------------------------
\nSource: World Economic Forum, Indef, 2003<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/low-business-competitiveness-hampering-economic-growth-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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