JAKARTA: Indonesia has gone down by 21 positions in the latest World Competitiveness Ranking from the peak it reached two years ago due to worsening government and business efficiency as well as infrastructure since President Prabowo Subianto took office.
The archipelago is now ranked below its South-East Asian peers, namely, the Philippines, Thailand, Vietnam, Malaysia and Singapore, which were ranked 47th, 26th, 27th, 15th and first, respectively.
The Institute for Management Development (IMD) recorded that the archipelago reached its best performance in 2024 when it secured the 27th global rank, only to nosedive to the 40th the following year and 48th this year, according to IMD’s 2026 ranking released on June 18.
The report wrote that “economies boasting credible institutions are better positioned to tackle today’s volatile and fragmented world”, signalling a shift from the traditional emphasis on cost, scale and output.
Arturo Bris, director of Switzerland-based IMD’s World Competitiveness Centre, said geopolitical conditions had been worsening and global fragmentation was increasing, making institutional strength ever more important.
“Nations with their own tried and tested, credible institutions gain an advantage in this context because, as the international systems cease to serve so many national needs, businesses can carry on as usual.”
Indonesia’s economic performance, one of the four main gauges in the ranking, remained on the same spot in the past two years at the 24th position, a significant jump from 42nd in 2022.
The domestic economy, one component of the gauge, had slipped by 15 spots to 24th this year.
The country’s business efficiency was relatively well-placed in 2024, ranking 14th out of 70 economies listed in the rank. The gauge then tumbled to rank 26th last year and nosedived even further to 50th this year, far worse than 31st five years ago.
The only notable improvement was recorded in the prices, business legislation and international investment components where Indonesia’s ranking went up by five to six spots. — The Jakarta Post/ANN
