JakartaPost-March 28
Indonesia has fallen behind its peers regarding business environment despite the government’s efforts to improve the ease of doing business in the country, as other countries have made more significant improvements. Indonesia’s business environment ranking is hovering at 64 globally based on its five-year score projection, lower than a ranking of 60 based on historical score data from the past five years, according to the latest annual study from the Economist Intelligence Unit (EIU) this March. EIU country forecast manager Prianthi Roy told The Jakarta Post on Tuesday that Indonesia actually made improvement to its overall business environment score, but other countries happened to do even better. “However, faster improvements made by Indonesia’s regional peers mean that its rank slips,” Roy said. Malaysia, which had stood far above Indonesia, slipped by one spot to 29th, while Thailand maintained its rank of 39 in the same period. Vietnam, meanwhile, saw a drastic upgrade to the 47th spot compared to the EIU’s historical data of 53rd for the same period. Roy explained that Indonesia did improve everywhere, but its macroeconomic outlook has been “the main factor holding back Indonesia’s business environment”, hindering Southeast Asia’s largest economy from going higher up the ladder. Roy also pointed to twin deficits that the country was facing, namely regarding its fiscal and external accounts. Both are expected to become more expensive to finance considering how global interest rates have remained near cyclical highs.
She also pointed out that the country has a high reliance on commodity exports which made Indonesia “highly vulnerable” to fluctuations in global commodity prices and changing demands. Read more at: https://www.thejakartapost.com/business/2024/03/28/indonesias-business-environment-ranking-slips-as-others-improve.html
