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COUNTRYPROFILE INDONESIA

CONTENTS<<COUNTRY>>

IMD World Competitiveness Yearbook 2020, Talent & Digital 2019: summaries

WORLD COMPETITIVENESSRANKING 2020

All data are available from theWorld Competitiveness Online.

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BASIC FACTSCapital

Land area (square km '000) 1,9172019

Exchange Rate (per $) 14.1482019

Population - market size (millions) 266.912019 4

Gross Domestic Product (GDP) (US$ billions) 1,119.22019 16

GDP (PPP) per capita (US$) 13,9962019 57

Real GDP growth (%) 5.02019 5

Consumer price inflation (%) 2.822019 45

Unemployment rate (%) 5.012019 32

Labor force (millions) 133.952019 4

Current account balance (% of GDP) -2.722019 51

Direct investment stocks inward ($bn) 226.32018 25

Direct investment flows inward (% of GDP) 2.182019 33

PEER GROUPS RANKINGSASIA - PACIFIC (14 countries) POPULATIONS > 20 MILLION (29 countries)

COMPETITIVENESS TRENDS - OVERALL

INDONESIAOVERALL PERFORMANCE (63 countries) Rank

Jakarta

CHALLENGES IN 2020Indonesian economy facing slowdown in the 1st semester; and

expecting slow recovery in 2nd semester.

Lembaga Management, FEB, Universitas Indonesia (LM FEB UI)

NuPMK Consulting, Jakarta

COMPETITIVENESS LANDSCAPE

48 42 43 32 40

2016 2017 2018 2019 2020

23

50

38

1115

33

6

4450

4247

4

38

2227

42

5347

58 56

Dom

estic

Eco

nom

y

Inte

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iona

l Tra

de

Inte

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l Inv

estm

ent

Empl

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ent

Pric

es

Publ

ic F

inan

ce

Tax

Polic

y

Inst

itutio

nal F

ram

ewor

k

Busi

ness

Leg

isla

tion

Soci

etal

Fra

mew

ork

Prod

uctiv

ity &

Effi

cien

cy

Labo

r M

arke

t

Fina

nce

Man

agem

ent

Prac

tices

Att

itude

s an

d V

alue

s

Basi

c In

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Tech

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Scie

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Hea

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Educ

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Economic Performance Government Efficiency Business Efficiency Infrastructure

1312

11 11 11

2016 2017 2018 2019 2020

21 17 17 14 16

2016 2017 2018 2019 2020

• Indonesian economy facing slowdown in the 1st semester; and expecting slow recovery in 2nd semester.

• A surge in unemployment and poverty rate due to economic uncertainties.

• A downturn of export/import activities due to the decreasing of global demand/supply.

• Government's unclear strategy for supporting small business due to lack of SMEs data mapping.

• Potential of financial sector crisis caused by the increase of non-performing loans.

Provided by:Lembaga Management, FEB, Universitas Indonesia (LM FEB UI)NuPMK Consulting, Jakarta

IMPROVEMENTSWCY 2019

WCY 2020 DECLINES

WCY 2019

4.3.18 Number of patents in force 0.1 0.5 4.4.23 Environment-related technologies 0.03

1.4.04 Employment - long-term growth 3.27 7.84 4.3.16 Patent applications per capita 0.89

3.2.14 Labor force long-term growth 2.61 4.76 1.1.18 Gross fixed capital formation - real growth 6.67

4.2.16 High-tech exports (%) 5.43 8.02 2.3.11 Transparency 5.78

2.3.08 Exchange rate stability 0.090 0.054 4.5.05 Pupil-teacher ratio (primary education) 13.98

2.4.14 Start-up days 19.6 13.0 2.5.05 Social cohesion 6.62

4.5.10 Student mobility inbound 0.02 0.03 2.5.04 Risk of political instability 5.01

1.2.12 Exports of commercial services ($bn) 23.95 30.87 2.1.09 Public finances 6.07

1.5.04 Office rent 492 406 2.1.10 Tax evasion 4.74

1.2.13 Exports of commercial services (%) 2.36 2.76 2.4.03 Public sector contracts 6.17

2.1.02 Government budget surplus/deficit (%) -2.20 -1.87 2.3.13 Bribery and corruption 3.48

1.5.01 Consumer price inflation 3.20 2.82 2.3.10 Adaptability of government policy 6.45

2.3.02 Cost of capital 5.56 6.19 3.3.07 Regulatory compliance (banking laws) 7.28

2.5.02 Homicide 0.50 0.44 1.2.09 Exports of goods (%) 17.29

4.1.07 Population - growth 0.94 1.04 3.3.19 Corporate debt 6.70

COMPETITIVENESS EVOLUTION & ATTRACTIVENESS INDICATORS

INDONESIACOMPETITIVENESS EVOLUTION

0.01

17.03

5.36

4.11

5.04

3.96

5.16

14.97

The criteria below highlight the 15 biggest Improvements and the 15 biggest Declines in the overall performance of the economy. They are

determined by the largest percentage changes in the value of each criterion from one yearbook to the next.

WCY 2020

5.81

KEY ATTRACTIVENESS INDICATORSFrom a list of 15 indicators, respondents of the Executive Opinion Survey were asked to select 5 that they perceived as the key

attractiveness factors of their economy. The chart shows the percentage of responses per indicator from the highest number of responses

to the lowest.

0.55

4.42

4.45

2.94

5.44

6.21

10.6%10.6%12.8%22.3%24.5%24.5%26.6%26.6%26.6%39.4%40.4%42.6%52.1%57.4%59.6%

0% 10% 20% 30% 40% 50% 60% 70%

Effective legal environmentCompetitive tax regime

High educational levelStrong R&D culture

Competency of governmentReliable infrastructure

Quality of corporate governanceAccess to financing

Effective labor relationsSkilled workforce

Policy stability & predictabilityBusiness-friendly environment

Open and positive attitudesDynamism of the economy

Cost competitiveness

WORLD COMPETITIVENESSDIGITAL RANKING 2019

All data are available from theWorld Competitiveness Online.

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Alpha AlphaLabelBeta BetaLabel Gamma GammaLabel1 2 2 2 2 2 24 4 4 2 2

6.5 4 4 2 28.5 4 4 2 2

10.5 4 4 2 2

2015 2016 2017 2018 2019

60 60 59 62 56

60 60 58 61 56

57 58 56 59 47

58 60 62 62 58

OVERALL

Future readiness

COMPETITIVENESS & DIGITAL RANKINGS

PEER GROUPS RANKINGS

ASIA - PACIFIC (14 countries) POPULATIONS > 20 MILLION (29 countries)

Knowledge

Technology

DIGITAL TRENDS - OVERALL

INDONESIA

OVERALL PERFORMANCE (63 countries)

OVERALL & FACTORS - 5 years

60 60 59 6256

4248

42 4332

2015 2016 2017 2018 2019

Digital

Competitiveness

14 1413

1413

2015 2016 2017 2018 2019

27 27 26 2823

2015 2016 2017 2018 2019

56 42 61 52

47 51 26 5656

58 60 21 60

Knowledge Talent Training & education Scientific concentration

Technology Regulatory framework Capital Technological framework

Future readiness Adaptive attitudes Business agility IT integrationThe direction of the triangle indicates the performance change from the last year: improved or stabledeclined

Overall Factors Sub-Factors

N.B. This graph provides only a comparison of the country’s performance in the two rankings.

u Overall top strengths

w Overall top weaknesses

Subfactors 2015 2016 2017 2018 201952 54 48 51 42

59 60 59 61 61

56 53 54 58 52

Talent Rank Rank Rank

Educational assessment PISA - Math 54 17 58 International experience 19 57 49 Foreign highly-skilled personnel 19 58 14 Management of cities 37 58 u 9 Digital/Technological skills 41 50 - Net flow of international students 39 53 57 45

Subfactors 2015 2016 2017 2018 201960 60 61 57 51

35 42 37 34 26

59 57 58 60 56

Regulatory framework Rank Rank Rank

Starting a business 57 18 44 Enforcing contracts 59 20 49 Immigration laws 34 u 6 18 Development and application of technology26 42 w 61 Scientific research legislation 33 u 13 w 61 Intellectual property rights 42 35 54

Subfactors 2015 2016 2017 2018 201961 61 63 61 60

41 48 35 46 21

59 59 61 60 60

Adaptive attitudes Rank Rank Rank

E-Participation 58 u 13 w 61 Internet retailing 58 25 17w Tablet possession 60 24 27 Smartphone possession 53 u 8 w 61 Attitudes toward globalization 17 24

Scientific concentration

Training & education Scientific concentration

Talent

Robots in Education and R&D

FUTURE READINESS

IT integration

Business agility IT integration

FACTORS BREAKDOWN - STRENGTHS AND WEAKNESSES

INDONESIA

TECHNOLOGY

Technological framework

Capital Technological framework

Opportunities and threats E-GovernmentWorld robots distribution Public-private partnerships

Total expenditure on R&D (%)Total public expenditure on education Total R&D personnel per capita

Training & education

Adaptive attitudes

Business agility

Venture capital Internet bandwidth speedInvestment in Telecommunications High-tech exports (%)

Regulatory framework

Capital

IT & media stock market capitalization Communications technologyFunding for technological development Mobile Broadband subscribersBanking and financial services Wireless broadbandCountry credit rating Internet users

Higher education achievement Female researchersPupil-teacher ratio (tertiary education) R&D productivity by publicationGraduates in Sciences Scientific and technical employmentWomen with degrees High-tech patent grants

Employee training

KNOWLEDGE

Agility of companies Cyber securityUse of big data and analytics Sofware piracyKnowledge transfer

WORLD TALENTRANKING 2019

All data are available from theWorld Competitiveness Online.

Visit our eShop

Alpha AlphaLabel Beta BetaLabel Gamma GammaLabel1 2 2 2 2 2 24 4 4 2 2

Value

w 3.1 % 57 10.5 % 55w 411 US$ 60 16.06 ratio 35 15.33 ratio 50u 6.25 Survey [0..10] 9 6.67 Survey [0..10] 17w 37.58 % 56 5.85 Survey [0..10] 36

Value

71.90 index 19 7.06 Survey [0..10] 29 6.96 Survey [0..10] 15u 6.38 Survey [0..10] 13 6.10 Survey [0..10] 39 6.30 Survey [0..10] 19w 5,788 US$ 58 82,139 US$ 54u 1.85 % 4 5.53 Survey [0..10] 35 16.63 micrograms 36

Value

u 2.30 % 8 6.30 Survey [0..10] 15 6.37 Survey [0..10] 31 6.08 Survey [0..10] 19u 6.54 Survey [0..10] 14 6.12 Survey [0..10] 33 19.36 % 50 6.40 Survey [0..10] 31 6.54 Survey [0..10] 31 6.32 Survey [0..10] 33w 0.03 number 61 395 Average 53

Investment & Development 2019 Rank

Health infrastructure meets the needs of society

2019 Rank

Total public expenditure on education Percentage of GDP

Pupil-teacher ratio (secondary education)Apprenticeships are sufficiently implemented

Readiness 2019 Rank

Educational assessment - PISA PISA survey of 15-year olds

Appeal

Exposure to particle pollution Mean population exposure to PM2.5, Micrograms per cubic metre

is readily available

Labor force growth Percentage change

Skilled labor

Management education meets the needs of the business community

Language skills are meeting the needs of enterprises

Student mobility inbound Foreign tertiary-level students per 1000 inhabitants

Primary and secondary education meets the needs of a competitive economy

Graduates in Sciences % of graduates in ICT, Engineering, Math & Natural Sciences

University education meets the needs of a competitive economy

Finance skills are readily available

International experience of senior managers is generally significant

Competent senior managers are readily available

Justice is fairly administered

Remuneration in services professions Gross annual income including supplements such as bonuses, US$

Remuneration of management Total base salary plus bonuses and long-term incentives, US$

Effective personal income tax rate Percentage of an income equal to GDP per capita

Brain drain (well-educated and skilled people) does not hinder competitiveness in your economy

Quality of life is high

Foreign highly-skilled personnel are attracted to your country's business environment

Cost-of-living index Index of a basket of goods & services in the main city, including housing (New York City = 100)

Attracting and retaining talents is a priority in companies

Worker motivation in companies is high

Gov. expenditure on education per student Percentage of GDP per capita (secondary education)

Total public exp. on education per student

INDONESIA

Spending per enrolled pupil/student, all levels

Pupil-teacher ratio (primary education) Ratio of students to teaching staff

Ratio of students to teaching staff

Employee training is a high priority in companies

Female labor force Percentage of total labor force

IMD World Talent Ranking 2019

OVERALL PERFORMANCE (63 countries)

43

47 4745

41

52

5556

51 51

2931

3234

24

4445

4749

42

2015 2016 2017 2018 2019

Overall

Investment &Development

Appeal

Readiness

51

2441

42

Investment & Development

Appeal

Readiness

The direction of the triangle indicates the performance change from the last year: improved or stabledeclined

2020

IMD WORLDCOMPETITIVENESSYEARBOOK

IMD

Wor

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Year

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