Indonesia has risen to the 27th position in the IMD 2024 World Competitiveness Ranking, marking a significant improvement from 34th place in 2023. This places Indonesia third in Southeast Asia, following Singapore and Thailand. Singapore maintains its leading position as the most competitive country globally.

Key Points:

• Indonesia is nearing the ranking of the United Kingdom (at position 28), surpassing both Japan (38) and India (39).
• Indonesia has improved its business efficiency ratings by leveraging factors such as the availability of skilled labor (2), effective corporate management (10), and societal norms and values that promote business efficiency (12).

"Over the past few decades, countries such as China, India, Brazil, Indonesia, and Turkey have experienced rapid growth and development. This has propelled them to play crucial roles in trade, investment, innovation, and geopolitics," explained Arturo Bris, Director of the IMD World Competitiveness Center (WCC), which has published the WCR since 1989.

In this year's ranking, Indonesia has also surpassed Malaysia, which dropped significantly to 34th place from 27th in 2023 due to currency depreciation and political uncertainty. Indonesia's rise in position reflects improvements in economic performance and stability.

Bris highlighted the strong economic performance of Southeast Asia this year, except for Malaysia, which saw a decline in its ranking. Indonesia's competitiveness surge is attributed to improvements in economic indicators, capital attractiveness, and GDP growth.

Indonesia's ranking approaches that of the United Kingdom (position 28), surpassing Japan (38) and India (39). Japan's decline in competitiveness is linked to the slow adoption of digital transformation, affecting its technology exports. India, while showing improvement, still lags behind Indonesia due to various economic factors and efficiency issues.

The IMD World Competitive Center (WCC) uses four indicators to determine its annual WCR rankings: economic performance, government efficiency, business efficiency, and infrastructure. Indonesia's competitiveness ranking is driven by its high scores in business efficiency (14), government efficiency (23), and economic performance (24). However, the country still lags in terms of infrastructure availability, particularly concerning health and environment infrastructure (61), education (57), science (45), and technology (32).

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In terms of business efficiency, Indonesia has successfully increased its scores due to the availability of skilled labor (2), effective company management (10), and social behaviors and values that support business efficiency (12). However, there is still room for improvement in financial skills (25) and company productivity (30).

Regarding government efficiency, Indonesia's lowest scores are related to business legislation (42), which affects the competitiveness of the private sector, such as trade, competition, and labor regulations. The second lowest score is in the social framework, measuring fairness in law enforcement, income, and gender equality. However, Indonesia has achieved strong rankings in tax policy (12) and public finance policy (18), related to state and central bank efficiency.

The WCR evaluates the long-term well-being of 67 countries beyond GDP, considering social, cultural, and sustainability aspects through global surveys and statistical analysis.

Here are the top five competitive countries in Southeast Asia: Singapore (1), Thailand (25), Indonesia (27), Malaysia (34), Philippines (52).

Source:https://seasia.co/infographic/malaysia-overtaken-by-thailand-and-indonesia-in-the-imd-world-competitiveness-index-2024