Performance overview: Indonesia
Indonesia (41st) drops four places as it is overtaken by a few countries. Despite many reforms to its business environment, its performance remains one of contrasts: the country ranks 10th for market size, 30th in the macroeconomic environment pillar—in spite of the protracted commodity bust—and 31st for innovation. It performs well in terms of financial development (42nd, up seven). But Indonesia ranks a low 100th in the health and basic education pillar (down 20),36 and 108th in the labor market efficiency pillar (up seven) as a result of various rigidities, prohibitive redundancy costs that amount to over a year’s worth of salary (133rd), and the low labor force participation rate of women (115th). Indonesia also ranks a low 91st in the technological readiness pillar (down six) because ICT penetration remains low—only one fifth of the population uses the Internet and there is just one broadband connection for every 100 people. However, technology uptake by firms is more widespread (53rd).