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Fears over
corruption, the costs of crime and poor ethics has led to the World Economic
Forum demoting Indonesia in its Global Competitiveness Index.
The
Geneva-based organization ranked Indonesia 50th of 144 nations in its 2012-13
report, down four places from the previous year’s position. In formulating the
annual index and accompanying report, the WEF reviews business, political and
social indicators in countries across the world.
The report,
released on Wednesday, said Indonesia was plagued by “concerns about corruption
and bribery, unethical behavior within the private sector, and the cost to
business of crime and violence.”
However, it
also praised some the government’s effort to slash red tape. “Bureaucracy is
less burdensome and public spending less wasteful than in most countries in the
region, and the situation keeps improving,” the WEF said.
On
infrastructure, the report said Indonesia remains largely “underdeveloped,” and
ranked it 78th.
The WEF
praised Indonesia’s macroeconomic performance, ranking the country 25th.
“Macroeconomic stability is buoyed by its solid performance on fundamental
indicators: the budget deficit is kept well below 2 percent of GDP, the public
debt-to-GDP ratio amounts to only 25 percent, and the savings rate remains
high,” the report said.
“Inflation
was reduced to around 5 percent in recent years after frequent episodes of
double-digit inflation in the past decade.”
Business
leader Sofyan Wanandi said the report carried significant messages. “We should
be ashamed because our competitiveness rating has been dropping for two
consecutive years,” said Sofyan, the chairman of the Indonesian Employers
Association (Apindo).
He
supported the WEF findings on infrastructure, adding that complicated
bureaucracy and poor productivity was plaguing the country’s competitiveness.
The report
said Indonesia was “one of the best performers within the developing Asia
region, behind Malaysia, China and Thailand yet ahead of the Philippines, Vietnam,
and all South Asian nations.”
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