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Improved policies and comprehensive trade reforms set to give great payoffs to Indonesia
JAKARTA, July 15, 2008 – Indonesia’s strong commitment to reforms has improved policies and boosted trade performance, says a new World Bank database and ranking tool. World Trade Indicators 2008 – Benchmarking Policy and Performance, released today, shows that Indonesian trade restrictiveness was measured at 4.5 percent in 2006, lower than the East Asia and Pacific average of 4.9 percent and far lower than the middle-income country average of 8.7 percent. In a global economy, Indonesia stands to benefit from continued liberalization of investment and trade-in-services. Recognizing this, the Indonesian government has passed a new law on investment and established transparent investment negative lists as well comprehensive program designed to harmonize tariff structures. “Since the financial crisis Indonesia has harmonized and lowered tariffs, and is now experiencing sustained increases in trade volumes,” said Sjamsu Rahardja, Trade Economist at the World Bank’s Indonesia country office. “The next agenda will be harnessing service liberalization and associated regulatory reforms to allow for even larger benefits.” The report also highlights the work ahead, especially the need to improve behind-the-border policies. Traders and businesses continue to face high costs due to corruption, a weak legal system, deteriorating infrastructure, inefficient tax and customs administration, rigid labor regulations, complex licensing and approval procedures, skill inadequacies, and a mushrooming of local “nuisance” taxes. However, recent initiatives including the National Single Window and electronic documents should shortly begin to address some of the problems. Commenting on the World Trade Indicators, Mari Pangestu, Indonesia’s Trade Minister said the report provides “an impressive array of information that policymakers can use as a benchmark to measure their country’s progress, as well as its position with respect to other countries. It should provide a good basis for informed policy making, including negotiations, and thus provide much needed information for small and/or developing countries with limited resources to develop such a comprehensive database.” According to the WTI, in 2007 Indonesia ranked 68 th out of 160, measured by real growth in trade and services, which, at 7.9 percent, is in line with the averages of its regional and income group comparators. Although Indonesia’s exports are dominated by commodities (oil and gas, coal, and palm oil), the country also has significant manufacturing exports and Indonesia’s exports are diversified regionally to include East and Southeast Asia, the European Union, and the United States. To learn more about the World Bank’s support for Indonesia visit www.worldbank.org/id
To access the World Trade Indicators report online visit www.worldbank.org/wti2008 - | 
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