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Indonesia ranks 37th out of 140 countries in this year’s Global Competitiveness Report released by the World Economic Forum (WEF), down from 34 last year.
The report assesses annually factors that drive productivity and prosperity in world economies.
Indonesia’s performance changed little from last year, despite having leapfrogged 16 places in the past two years.
“Our data suggest that efforts to tackle corruption—a priority for the previous as well as the current administration—are paying off, with Indonesia improving on almost all measures related to bribery and ethics,” the report said.
It also said that under the leadership of President Joko Widodo, whose administration will mark its first anniversary in October, Indonesia still has big problems in infrastructure.
The country ranks 62nd in this year’s infrastructure index, or down six places from last year. Infrastructure is one of the 12 pillars that the WEF uses to measure a country’s competitiveness.
Joko repeatedly said that infrastructure development is a priority in his administration and that the $19 billion dollar fiscal space acquired from eliminating fuel subsidy last year at the start of his presidency would be spent mainly on infrastructure.
The government has allocated Rp 313,5 trillion in the proposed 2016 budget to finance his government’s ambitious infrastructure projects in five years that include 46 water reservoirs, 24 sea ports, 2,600 kilometer of toll road, 5,000 kilometer of rail tracks and 35 thousand Megawatt power plants. The 2016 infrastructure allocation is up from Rp 290 trillion this year.
The report also said another area that Indonesia needs to seriously tackle is public health, though this pillar’s index is up three from last year to 96th.
According to the report, Indonesia has one of the highest rates of infant mortality outside sub-Saharan Africa and prevalence of communicable diseases.
Indonesia’s competitiveness index rose steadily from 50th in 2012, 38th in 2013 and 34th in 2014. The 2013 – 2014 competitiveness index put Indonesia below Singapore, Malaysia, Brunei and Thailand.
This year’s top three most competitive countries remain the same from last year. Switzerland has been in the first place for the seventh consecutive year, while Singapore and the United States ranked the same as last year, in the 2nd and 3rd place respectively.
WEF measures an economy’s competitiveness based on 12 pillars, namely institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labor market efficiency, financial market development, technological readiness, market size, business sophistication and innovation.
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