RI ranks very low in global competitiveness

RI ranks very low in global competitiveness

Adianto P. Simamora and Tantri Yuliandini, The Jakarta Post, Jakarta

Indonesia's economy has become more uncompetitive, as
suggested by the latest 2001 Global Competitiveness Report
released by the World Economic Forum on Thursday.

This report, which ranks 75 countries, downgraded Indonesia to
64th place from 44th last year, overtaken by other countries that
were previously well below Indonesia's ranking, like Peru, India,
El Salvador, Bulgaria, Venezuela and Russia.

Produced by Harvard University professors Jeffrey Sachs and
Michael Porter, the report measures the comparative strengths and
weaknesses of national economies.

It combines existing economic data with the results of a
survey of 4,600 business executives, who provide opinions about
economic factors not contained within reliable data.

The survey examines competitiveness of countries in a
timeframe of about five to eight years. Most of the analysis was
completed prior to the Sept. 11 terrorist attacks in the United
States.

According to the survey, Finland ranks first, replacing the
United States which slipped into second place. Japan, which
continues to experience economic stagnation, maintains a low
position at 21st, down one slot from last year.

Commenting on the survey's results, Gadjah Mada University
economist Sri Adiningsih said that the drop in rank was "pitiful"
and it was apparent that even a weaker rupiah exchange rate
against the U.S. dollar had not made Indonesia more competitive
in the export market.

She said the drop was closely related to the "unsupportive"
government policies for the business community and the high
number of levies and duties.

"This drop (in the ranking) will greatly affect the
government's efforts to attract (foreign) investors ... on top of
that, the current political and security concerns will make our
economic outlook more gloomy," she said.

Sri said that while the government was busy with meetings on
the ASEAN Free Trade Area (AFTA), World Trade Organization (WTO)
and Asia Pacific Economic Cooperation (APEC), it had forgotten to
increase the competitiveness of Indonesian products.

"This is dangerous because how can a country with weak
competitiveness compete within the global market?" she queried.

Institute for Development of Economics and Finance (Indef)
economist Bustanul Arifin said that it was just further proof
that Indonesia still has a lot of work to do and that key factors
were the low quality of human resources and high rate of
corruption.

Indonesia's ability to attract foreign investment was also
still too low, proven by the number of sectors still confined to
the negative investment list, he said.