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Jakarta Post

Why banking sector's role remains small

PREMIUM
Jakarta   /   Mon, January 8, 2018   /  10:31 am
Why banking sector's role remains small The tradable sectors — agriculture, mining, and manufacturing industry — contributed about 40 percent of gross domestic product. This sector also employs about 45 percent of Indonesian labor, mostly of low educational background. (Shutterstock/-)

The World Economic Forum’s 2017-2018 Global Competitiveness report places Indonesia in 36th place, up from 41st last year. However, Indonesia’s position is still lower than its peers, particularly when compared to Thailand (32), Malaysia (23) and Singapore (3). The report methodology considers basic requirements, efficiency enhancers and innovation and sophistication factors. The report also named the 16 most problematic factors in doing business in each country. Surprisingly, access to financing was deemed one of the top three challenges for doing business in Indonesia. This factor influences about 9.2 percent of the competitiveness index, which is very questionable as the market size in Indonesia serves an advantage. If access to finance remains difficult, it will be difficult to maximize the large consumer base and middle-income population. Last year, the share of...

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