Improving Competitiveness using the improvement of Competition Index in Indonesia.

Monday, October 3, 2016

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Indonesia’s competitive index was struck downward. In the report by World Economic Forum (WEF) 2016/2017, Indonesia ranked at 41 of 138 countries. This report indicated that Indonesia’s position decreased four places compared to 2015 and seven places to 2014. Indonesia is lost to other ASEAN countries like Thailand (rank 34) and Malaysia (rank 25). Not to mention Singapore who places sky high at rank 2.

This problem shall take seriously by the government, considering this rating is closely related to the provided economic policies. Such fluctuation also relates to the quality of national economic growth. Government shall brave enough to revisit the effectiveness of their national economic policy packages. The implementation of policy reform shall made work.

KPPU declared itself ready to assist government in improving competitiveness, specifically when market condition or competition environment is part of the 12 indicators of competitiveness by WEF. Before attending the ICN Cartel Workshop, Chairman of KPPU, Syarkawi Rauf stated that in order to improve national competitiveness, fair competition environment shall be created.

“It needs an identification of fair competition environment to map challenges and efficiency opportunities in national industry and investment climate”, explained Syarkawi.

From such identification, KPPU has published a Competition Index based on data processing from the Indonesian Statistic, Financial Service Authority, Ministry of Trade, and Ministry of Industry. Furthermore, Syarkawi explained that the Competition Index, which released in August 2016, showed that competition index in Indonesia is below 0.5 (from the scale 0 to 1). It means fair competition is yet met, since some sectors are dominated by certain companies with market control of 30% from total asset in an industry.

“This competition index is hope to be a guidance for the government to determined precise economic policies in an industry, and be use by the undertakings to foster national competitiveness. Hence, Indonesia will able to become important player in the globalization”, concluded Syarkawi.