Corruption undermines RI's competitiveness
Sari P. Setiogi, The Jakarta Post, Jakarta
Rampant corruption and ineffective bureaucracy are the two most important factors behind the country's low business competitiveness index, according to the latest global competitiveness report of the World Economic Forum (WEF).
The other negative factors were political instability, limited access to credit, tax rulings and tax rates, said Tulus Tambunan of the Institute for Economic Studies, Research and Development (LP3E), which helped WEF in conducting the survey in Indonesia.
He was speaking to the press on Friday to unveil the WEF report.
According to the WEF report, Indonesia ranked 60 (out of a total 102 countries surveyed) in terms of business competitiveness. In comparison, neighboring Malaysia ranked 26, Singapore 8, Thailand 32, while Vietnam is ranked 50.
Finland was ranked the most competitive country in the world, edging out the United States. Taiwan and Singapore were the highest-ranked Asian economies, in fifth and sixth place respectively.
Surprisingly, despite its heady economic growth, China, now No. 44, fell nine places down the table because of a remarkable deterioration in the perceived quality of public institutions, said the survey.
WEF launched the business competitiveness index for the first time this year.
Analysts have said weak investment activities in the country and slow export performance have been linked to the above problems. They said that pushing investments and exports were key to a stronger economic growth needed to create more jobs for the millions of unemployed.
Meanwhile, in terms of the growth competitiveness index, Indonesia is ranked 72nd, down from last year's 66, which is also lower than the above mentioned countries.
While some other countries benefited from their excellent performance in technology, macro economic environment and quality of public institutions, Indonesia is relatively weak in these areas.
The Geneva-based WEF is an independent international organization committed to improving the state of the world.
Soy Pardede of the Indonesian Chamber of Commerce and Industry (Kadin) said that the outcome of the survey would not have a significant effect on investment and trade activities in Indonesia as many of the business players here had been already accustomed to the above negative factors.
He said that Kadin had started a program to help create a better business climate in the country such as through the recent anticorruption campaign.