Indonesia’s path to sustained economic growth and global competitiveness hinges on strengthening governance and restoring trust in public institutions. Persistent challenges—such as weak rule of law, a low corruption perception index, and bureaucratic inefficiencies—undermine investor confidence and hinder progress. Compared to regional peers, Indonesia struggles with higher barriers to entry for businesses, with foreign investors facing disproportionately high costs. Additionally, the limited application of meritocracy within institutions further erodes public trust. Addressing these governance gaps through meaningful reforms is imperative for Indonesia to achieve its ambitious targets, including 8% of economic growth and 0% extreme poverty.
GOVERNANCE
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Indonesia grapples with serious challenges in governance...
Indonesia’s Rule of Law has worsened and fallen sharply below the global average score…
Rule of Law Index
Meanwhile, Indonesia’s Corruption Perception Index has continued to decline, and it now ranks the lowest amongst its peers…
Corruption Perception Index
Furthermore, Indonesia’s bureaucracy, such as the process of obtaining a business permit, is expensive compared to its counterparts.
Cost to Register a New Firm (% of GNI Per-Capita)
Besides the high cost, the Indonesia’s bureaucracy also lacks of meritocracy. 46.5% of 587 government agencies show poor and inadequate meritocracy.
Assessment Results of Meritocracy Implementation (2023)
These challenges require immediate:
RESEARCH
COLLABORATIONS
IMPACT
From Research to Impact
Advancing Indonesia's Governance Reform Towards Achieving the 'Indonesia Emas 2045' Vision
This study utilizes the World Governance Indicators (WGI) framework, developed by the World Bank, to provide a comprehensive analysis of Indonesia’s governance landscape. It highlights effective practices and offers practical recommendations to address the challenges faced by Indonesia. IBC believes the pressing need for governance reform is not only a matter of improving administrative efficiency but also a strategic imperative for Indonesia’s long-term development objectives. Without comprehensive reforms, the nation risks overcoming persistent issues like corruption, inefficiency, and inadequate public services.
The document emphasizes the importance of systematic and thorough governance reform as a high-priority agenda, crucial for achieving ambitious economic growth targets and enhancing the well-being of the Indonesian people.
Forecasting the Course Ahead
The Indonesian Business Council (IBC) hosted the ‘IBC Business Competitiveness Outlook 2025,’ emphasizing four key approaches to enhance collaboration with the business sector and attract investment. These include governance reforms to improve ease of doing business, private-public collaboration in infrastructure development to boost socio-economic quality, advancing industrialization through downstream strategies, and promoting a green economy. Explore the IBC’s 2025 Outlook.
The Indonesia Economic Summit 2025
IES is a high-level forum designed to bring together international business leaders, policymakers, thinkers, and industry champions. The forum explores Indonesia’s current and future economic development, and how it becomes the new growth hub in the global landscape. In its first year, IES explore a range of topics, including industrialization, fiscal and monetary policy, investment, food security, energy transition, state-owned enterprise reform, international market diversification, green protectionism, human talent development, and others.
Analyzing the Issues
Agendas
Indonesia Economic Summit 2025
IES is a high-level forum designed to bring together international business leaders, policymakers, thinkers, and industry champions. The forum will explore Indonesia's current and future economic development, and how it...
Fellows
Khairul Rizal, ST, MPP, PhD
Senior Fellow
Muhammad Erza Aminanto, Ph.D
Fellow
Fazlur Rahman Hassan, S.T, MEPP
Fellow
