February 21, 2018

A review of Indonesia's economic competitiveness

After the commodity boom and quantitative easing policy was over, Indonesia is struggling to compete in the world market resulting a low rate of participation in the global production network. In addition, unclear industrial policy, downstreaming strategy and value added obsession are some of the misguided approaches to rejuvenate Indonesia’s industry. A substantial reform is essential to change the old paradigms in trade and industry such as populist, protectionist and inward-looking policy. Instead, an open trade regime, facilitating investment policy and a more flexible labor market are much-needed strategies to increase Indonesia’s competitiveness in the future.