Indonesia climbs 7 places, surpasses Malaysia, Japan and UK, in IMD competitiveness ranking

19 Jun 2024


Indonesia has advanced to the 27th position in the 2024 IMD World Competitiveness Ranking (WCR), a significant improvement from 34th place in 2023, placing the nation ahead of Malaysia, Japan, and the UK in the global rankings. 


According to Arturo Bris, Director of the Swiss-based IMD (International Institute for Management Development) World Competitiveness Center (WCC), Indonesia’s rise is attributed to improved economic performance, successful capital attraction, and GDP growth. The IMD WCR evaluates 67 countries based on four indicators: economic performance, government efficiency, business efficiency, and infrastructure. 


Indonesia's business efficiency improved significantly, with the country ranking 14th. Factors contributing to this include the abundance of available labor, effective company management, and societal behaviors that support business efficiency. However, Indonesia still has room for improvement in financial performance and company productivity.  


In terms of government efficiency, Indonesia ranked 23rd, with strong performances in tax policies and public financial policies. Nevertheless, challenges remain in business legislation and social framework measures, such as law enforcement fairness and income and gender equality. 


In economic performance, Indonesia ranked 24th, reflecting its stable economic environment and growth. Despite these advancements, Indonesia continues to face challenges in infrastructure, particularly in health and environmental infrastructure, education, science, and technology. 


In Southeast Asia, Indonesia is now the third most competitive nation, following Singapore and Thailand. Singapore maintains its global lead, while Malaysia dropped to 34th place from 27th due to currency depreciation and political uncertainties. Globally, Indonesia's position of 27th places it just ahead of the UK, which is 28th, and significantly ahead of Japan (38th) and India (39th). Japan's lower ranking is linked to its slower digital transformation affecting technology exports. India's ranking, while improving, still lags behind Indonesia due to various economic and efficiency factors. 


The IMD WCR's assessment encompasses not just economic metrics but also social, cultural, and sustainability factors. The ranking provides a comprehensive view of a country's ability to foster long-term prosperity. 


One of the significant challenges highlighted in the 2024 WCR is the implementation of Artificial Intelligence (AI), as AI inaccuracies can lead to inefficiencies and reduced productivity. Additionally, the initial investments in AI technology can be substantial, and the ongoing costs of maintenance and upgrades can be significant. These challenges are particularly pertinent as AI adoption becomes more widespread, with executives across various regions identifying it as a top concern for 2024. 


Here are Southeast Asia's top five competitive countries: 

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