Summary of Indonesia's Private Sector Development Assessment
While Indonesia's rank in overall ease of doing business improved in 2015 according to World Bank's worldwide competitiveness ranking, overall ease of doing business still ranks unfavorably compared to its regional peers.
The formal private sector consists of large business groups, state-owned enterprises and foreign investors. It is estimated that 54% of the private sector enterprises, mainly micro and small enterprises, operate in the informal sector. The presence of a large informal sector, over time, weakens productivity growth and eventually reduces the country’s global competitiveness. In addition, many new local government owned state enterprises have been established. While progress is being made, effective implementation of the policies aimed at improving the private sector enabling environment are taking longer than anticipated.
About ADB Papers on Indonesia
The ADB Papers on Indonesia are designed to provide information, analysis, and advice on issues of interest to Indonesia's development stakeholders. The series is produced by sector experts and maintained by the ADB Indonesia Resident Mission.