Indonesia Rises Sharply in World Competitiveness Ranking 2024, While Malaysia and Japan Decline

Indonesia Rises Sharply in World Competitiveness Ranking 2024, While Malaysia and Japan Decline
Jakarta di malam hari | Photo by Achmad Al Fadhli on Unsplash

The 2024 IMD World Competitiveness Ranking (WCR) reveals that Indonesia has significantly improved its position, climbing to 27th place globally.

Indonesia has made a notable leap from 34th place in 2023 to 27th in 2024. In Southeast Asia, Indonesia now ranks third, trailing only Singapore and Thailand, with Singapore holding the top spot.

The top five countries in Southeast Asia according to the WCR 2024 are:

  1. Singapore (1st globally)
  2. Thailand (25th globally)
  3. Indonesia (27th globally)
  4. Malaysia (34th globally)
  5. Philippines (52nd globally)

Arturo Bris, Director of the World Competitiveness Center (WCC) at IMD, noted that nations like China, India, Brazil, Indonesia, and Turkey have seen rapid growth, significantly impacting trade, investment, innovation, and geopolitics.

“Countries such as China, India, Brazil, Indonesia, and Turkey have grown rapidly and now play significant roles in these arenas,” Bris said in an official statement on Tuesday, June 18, 2024.

In 2024, Indonesia’s and Malaysia’s positions have switched, with Malaysia dropping to 34th from 27th place due to factors like currency weakness, political instability, and policy uncertainty. Conversely, Indonesia rose from 34th to 27th place.

Bris attributed Indonesia’s improved ranking to better economic performance, attractive capital influx, and GDP growth. He highlighted that while Southeast Asia generally performed well economically, Malaysia's ranking fell.

Globally, Indonesia’s ranking is close to the UK (28th), and it surpasses Japan (38th) and India (39th). The UK’s ranking has recently improved following a post-Brexit decline.

Japan’s Competitiveness Waning

Japan’s decline in competitiveness is linked to its slower pace in digital transformation and reduced technology exports. Once dominant in world technology, Japan now lacks leading multinational tech companies in areas like AI, microchips, and cloud computing.

Although India has gradually improved its ranking over the past five years, its progress is slower compared to Indonesia primarily due to economic and business efficiency factors such as tax structure, banking, judicial governance, job opportunities, and business management efficiency.

The IMD World Competitiveness Center assesses rankings based on economic performance, government efficiency, business efficiency, and infrastructure. Indonesia’s rise is largely due to high scores in business efficiency (14th), government efficiency (23rd), and economic performance (24th), though it still lags in infrastructure, especially in health, environment (61st), education (57th), science (45th), and technology (32nd).

In business efficiency, Indonesia excels with labor availability (2nd), effective company management (10th), and supportive community values (12th). However, it needs to improve financial performance (25th) and productivity (30th). Regarding government efficiency, its lowest scores concern business legislation (42nd) and social fairness.

In tax policy (12th) and public financial policy (18th), which includes the efficiency of central and commercial banks, Indonesia performs well.

The IMD WCR 2024 ranks countries based on long-term prosperity potential, using surveys and hard data to evaluate purchasing power, productivity, GDP, and social, cultural, and sustainability factors.

Akhyari Hananto

I began my career in the banking industry in 1997, and stayed approx 6 years in it. This industry boost his knowledge about the economic condition in Indonesia, both macro and micro, and how to More understand it. My banking career continued in Yogyakarta when I joined in a program funded by the Asian Development Bank (ADB),as the coordinator for a program aimed to help improve the quality of learning and teaching process in private universities in Yogyakarta. When the earthquake stroke Yogyakarta, I chose to join an international NGO working in the area of ?disaster response and management, which allows me to help rebuild the city, as well as other disaster-stricken area in Indonesia. I went on to become the coordinator for emergency response in the Asia Pacific region. Then I was assigned for 1 year in Cambodia, as a country coordinator mostly to deliver developmental programs (water and sanitation, education, livelihood). In 2009, he continued his career as a protocol and HR officer at the U.S. Consulate General in Surabaya, and two years later I joined the Political and Economic Section until now, where i have to deal with extensive range of people and government officials, as well as private and government institution troughout eastern Indonesia. I am the founder and Editor-in-Chief in Good News From Indonesia (GNFI), a growing and influential social media movement, and was selected as one of The Most Influential Netizen 2011 by The Marketeers magazine. I also wrote a book on "Fundamentals of Disaster Management in 2007"?, "Good News From Indonesia : Beragam Prestasi Anak Bangsa di dunia"? which was luanched in August 2013, and "Indonesia Bersyukur"? which is launched in Sept 2013. In 2014, 3 books were released in which i was one of the writer; "Indonesia Pelangi Dunia"?, "Indonesia The Untold Stories"? and "Growing! Meretas Jalan Kejayaan" I give lectures to students in lectures nationwide, sharing on full range of issues, from economy, to diplomacy Less
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