ASIATODAY.ID, JAKARTA – Indonesia is far behind a number of countries in Southeast Asia in the 2024 Sustainable Trade Index based on the Hinrich-IMD Sustainable Trade Index (STI). This year, Indonesia only rose one rank to 18th in the world out of 30 countries measured in the Hinrich-IMD STI 2024 study.
Quoted from the statement of the International Institute for Management Development (IMD), in Southeast Asia, with a total score of 45.3, Indonesia is only in sixth position out of ten Southeast Asian countries included in the study. The five countries with the best Sustainable Trade Index in the Southeast Asia region are Singapore ranked 4th in the world, Thailand ranked 12th in the world, the Philippines ranked 13th, Vietnam ranked 14th, and Malaysia ranked 15th.
However, Indonesia managed to outperform India which is ranked 24th and Russia which is in last place at 30th. Meanwhile, from other Southeast Asian countries, Indonesia is only ahead of Cambodia which is ranked 19th, Laos 22nd, Brunei Darussalam 24th and Myanmar 27th.
Meanwhile, the five countries with the best sustainable trade index in the world are New Zealand with a score of 100, followed by the UK with a score of 97.7, Australia with a score of 87.4, Singapore with a score of 85.7, and Japan with a score of 81.5.
“Global trade growth is expected to accelerate again in 2024, which is why we are measuring this trade index, because trade is one of the important factors driving sustainable economic competitiveness in a country,” said Chief Economist of the IMD World Competitiveness Center Christos Cabolis in an IMD statement, quoted on Wednesday, October 23, 2024.
STI is a study that measures whether a country’s economic trade has been able to balance the three pillars of sustainability, namely economic growth, social progress, and environmental management.
“The index shows that several countries have succeeded in carrying out sustainable trade; boosting trade value, but while still building their environmental resilience,” said Hinrich Foundation CEO Kathryn Dioth.
The score that determines the ranking in Hinrich-IMD STI 2024 is measured based on 72 data points divided into three main categories; economic, social, and environmental. This report also provides an explanation of a number of improvements that Indonesia needs to make in a number of these sectors to improve its sustainable trade score.
Economic indicators show how effective a country’s strategy is in taking advantage of global trade opportunities. From the economic sector, three things that must receive attention are technological innovation which has the lowest score (5.27) followed by the value of exports of goods and services (score 7.02) and domestic credit for the private sector (based on the percentage of Gross Domestic Product) with a score of 10.19.
Countries with strong technological infrastructure, efficient trade policies, including competitive tariff policies tend to increase trade competitiveness and attract foreign investment. Hong Kong, the United States, South Korea, China, and the United Kingdom excel in this sector.
The social factor measures support for human resource development to drive sustainable competitiveness. In the social sector, Indonesia’s red report card is in the life expectancy at birth which is at a score of 12.15 with an average age of 68.3 years. Other factors that need attention are political stability (score 28) and educational attainment (score 26.27).
Education is one of the important points in the social sector, because it provides skills and flexibility for the workforce to face economic challenges and be responsive to opportunities. Countries such as New Zealand, Canada, Australia, Taiwan, and Singapore are the best examples of developing resilient social infrastructure to support long-term trade competitiveness.
The environmental factor evaluates whether a country has managed natural resources and reduced the environmental impact of its economic activities, especially related to global trade.
In its statement, IMD said that for this sector, Indonesia needs to improve wastewater management (score 23.27), renewable energy development (score 26.4), and deforestation improvement (28.54).
New Zealand, England, the Philippines, Mexico, and Australia managed to become countries with high scores in this sector. They have stronger environmental policies and commitments than other countries. (AT Network)
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