Of more interest is data on Indonesia from the forum’s Global Competitiveness Report 2013-14, which is compared to 2008-09. It turns out there are symptoms of an anomaly in Indonesia. The comparison shows there were improvements in the performance of the Indonesian bureaucracy, as survey respondents who said that inefficient government bureaucracy was the most problematic factor fell from 19 percent to 15 percent. At the same time, those who felt that corruption was the most problematic factor increased from 11 percent to 19 percent. This tells us that bureaucratic efficiency, or lack thereof, is not always consistent with an increase or decrease in corruption.

In addition, the quality of education is a powerful predictor of the wealth that countries will produce in the long run. Many nations can move from low-income to middle-income status, but as labor costs rise, only countries that boost productivity via improved education and master innovation will develop and avoid the middle-income trap. The quality of education in Indonesia is declining and the country today lags behind other Asian countries in numerous sectors.

Time to change

It is necessary to introduce radical and innovative changes to Indonesia’s governance/public administration in order to transform comparative advantages into competitive factors, so that Indonesia exhibits strong competitiveness in the era of globalization. Hence, the governance system in Indonesia must be changed.

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