Global Index of Economic Openness – Indonesia case study

This report from the UK think tank Legatum Institute is part of a series of case studies examining the links between a nation’s Economic Openness and prosperity, informed by the insights generated by its Global Index of Economic Openness.

The Legatum Institute’s mission is to create the pathways from poverty to prosperity, and our work is focused on understanding how prosperity is created. To that end, we have published a Global Index of Economic Openness to rank countries’ ability to interact with, and benefit from, both domestic and international commerce. This is one of multiple in-depth country reports, which analyse performance on the key characteristics of openness to trade, investment, ideas, competition, and talent. Indonesia’s achievements have led to impressive growth rates – its stable political environment and reasonably robust democratic processes, as well as its active civil society and press continue to underpin greater economic openness, along with its strong banking system and sound fiscal policy. However, as Indonesia enters the coming five years of President Widodo’s new term, it faces other policy challenges across a number of areas, not least that infrastructure is severely constrained due to a legacy of protectionist policies and burdensome regulations. Confronting vested interests in government and the private sector, and committing to improve infrastructure, human capital, investment and reforming the bureaucracy are all critical elements that could significantly boost economic openness, leading to greater prosperity for all in Indonesia.

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