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2008 OECD Economic Surveys: Indonesia 2008

Economic Assessment

image of OECD Economic Surveys: Indonesia 2008

OECD's first (2008) survey of Indonesia's economy reviews growth performance and key policy challenges including improving the business and investment climate and improving labour market outcomes. This publication includes StatLinks, URLs linking tables and graphs to Excel ® spreadsheets containing the underlying data.

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Improving the business and investment climate

Indonesia’s business environment is discouraging entrepreneurship and holding back private-sector growth and development. Weaknesses in the regulatory framework, infrastructure bottlenecks and poor governance continue to weigh down on investment. Policies have been put in place to address these problems, but much remains to be done. An important recent initiative is the enactment of the Investment Law in 2007, which strengthened the foreign investment regime. This chapter argues that options for reform could focus on making regulations more probusiness, including by removing red tape and onerous provisions at the local level of government, improving governance and relaxing remaining restrictions on foreign investment. Further financial deepening would facilitate access by enterprises to more abundant, cheaper sources of finance.

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