Fostering competitiveness to increase investment, trade, and good jobs

INDONESIA RISING. Policy Priorities for 2010 and Beyond 53478 Fostering Competitiveness to Increase Investment, Trade And Good Jobs Key Messages 1. Indonesia has made good progress in improving the investment climate and implementing trade reforms. Formal sector employment is once again expanding, poverty has been falling, and an incipient middle class is emerging. 2. Less affected than its neighbors by the global economic crisis, Indonesia has a unique opportunity during the recovery and post-recovery to increase both global market share and domestic sales. 3. To make this happen, the key is to push ahead with reforms designed to improve competitiveness, increase flexibility in the labor market, and avoid protectionism that stifles efficiency and innovation. Key Action 1. Create the institutional structures needed to deliver consistent policy. Global evidence indicates that strong institutions drive regulatory reforms and improve coordination. 2. Accelerate administrative reforms designed to foster competitiveness. Reduce administrative burdens on businesses, improve the investment negative list (DNI or Daftar Negatif Investasi), lower non-tariff barriers, strengthen the national single window (NSW) and coordinate logistics policies. 3. Negotiate a `Grand Bargain' in labor reform