- BLONTANK POeR
VIVAnews - Former Head of Fiscal Policy Anggito Abimanyu said the declining competitiveness in Indonesia is mostly due to the weakening of infrastructure development in some regions.
"The uneven infrastructure development in various regions and villages in Indonesia, such as roads construction, is the largest institutional impediment," Anggito told VIVAnews.
In the long run, Anggito went on to say, if the infrastructure problem is not resolved it will hinder the coming of investors to Indonesia.
"The construction of road and infrastructure will hamper the coming of investors to Indonesia," he said
As shown in the 2011-2012 Global Competitiveness Report released by World Economic Forum, Indonesia's competitiveness rank dropped from 44th in 2010 to 46th this year, out of 142 countries.
In spite of the decline, Indonesia is still considered to have the best performance among developing countries in Asia, after Malaysia and China, above India, Vietnam and Philippines. This was due to the improved macroeconomic conditions, in spite of the concerns about inflation.
Sound fiscal policy led to the decrease of budget deficit and public debt figures to low levels. This contributes to the improving state rating. As regards macro-economic condition, Indonesia is ranked 23rd (better than that of 2007 at 89th).
This condition also affected the quality of infrastructure, although it is still considered low (at the rank of 76th, six levels up). The absence of the port facility construction and signs of progress (ranked 103rd or down seven levels, scoring 3.6) are quite alarming. In addition, the condition of electricity supply is still unreliable (at the rank of 89th).
Meanwhile, the assessment of public institutions also dropped 10 levels to the rank of 71st. The government is currently addressing the issues of corruption and bribery. These issues are still considered negative for business in the country.