Economic Freedom of the World
economic-freedom-of-the-world-2016
economic-freedom-of-the-world-2016
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96 • <strong>Economic</strong> <strong>Freedom</strong> <strong>of</strong> <strong>the</strong> <strong>World</strong>: 2016 Annual Report<br />
Indonesia<br />
1980 1990 2000 2005 2010 2013 2014<br />
Rating (Rank) Rating (Rank) Rating (Rank) Rating (Rank) Rating (Rank) Rating (Rank) Rating (Rank)<br />
Summary Ratings (Rank) 4.90 (62) 6.21 (37) 6.05 (85) 6.49 (85) 6.89 (79) 7.02 (76) 7.02 (79)<br />
Rating (Data) Rating (Data) Rating (Data) Rating (Data) Rating (Data) Rating (Data) Rating (Data)<br />
Area 1. Size <strong>of</strong> Government 5.27 7.13 7.57 7.59 7.90 7.73 7.71<br />
A. Government consumption 6.84 (16.75) 7.93 (13.04) 8.98 (9.47) 8.47 (11.19) 7.72 (13.75) 7.65 (14.00) 7.56 (14.28)<br />
B. Transfers and subsidies 9.24 (3.30) 9.59 (2.00) 8.30 (6.73) 8.90 (4.55) 9.36 (2.84) 8.77 (5.02) 8.77 (5.02)<br />
C. Government enterprises and investment 2.00 (49.50) 4.00 (32.50) 7.00 (20.70) 7.00 (20.70) 7.00 7.00 7.00<br />
D. Top marginal tax rate 3.00 7.00 6.00 6.00 7.50 7.50 7.50<br />
(i) Top marginal income tax rate 3.00 (50) 7.00 (35) 7.00 (35) 7.00 (35) 8.00 (30) 8.00 (30) 8.00 (30)<br />
(ii) Top marginal income and payroll tax rate 7.00 (35) 5.00 (40) 5.00 (40) 7.00 (35) 7.00 (35) 7.00 (35)<br />
Area 2. Legal System and Property Rights 3.41 4.72 3.36 4.29 4.48 4.77 4.72<br />
A. Judicial independence 3.01 3.01 4.33 4.77 5.05<br />
B. Impartial courts 4.01 3.92 4.53 4.99 4.85<br />
C. Protection <strong>of</strong> property rights 3.13 4.59 4.94 5.48 5.53<br />
D. Military interference in rule <strong>of</strong> law and politics 3.33 4.17 4.17 4.17 4.17<br />
E. Integrity <strong>of</strong> <strong>the</strong> legal system 3.33 5.00 5.00 5.00 5.00<br />
F. Legal enforcement <strong>of</strong> contracts 1.17 1.17 1.91 1.92<br />
G. Regulatory costs <strong>of</strong> <strong>the</strong> sale <strong>of</strong> real property 5.81 6.03 5.93 5.93<br />
H. Reliability <strong>of</strong> police 3.51 4.56 5.22 5.22<br />
I. Business costs <strong>of</strong> crime 7.40 5.57 5.46 4.86<br />
Area 3. Sound Money 6.54 8.76 6.20 7.39 8.99 9.14 9.26<br />
A. Money growth 6.30 (18.49) 8.03 (9.87) 5.56 (22.19) 8.45 (7.76) 8.66 (6.70) 8.64 (6.79) 9.08 (4.60)<br />
B. Standard deviation <strong>of</strong> inflation 6.07 (9.82) 7.86 (5.35) 0.00 (27.72) 8.21 (4.48) 8.32 (4.21) 9.19 (2.02) 9.26 (1.86)<br />
C. Inflation: most recent year 3.80 (30.99) 9.14 (4.28) 9.26 (3.72) 7.91 (10.45) 8.97 (5.13) 8.72 (6.41) 8.72 (6.39)<br />
D. <strong>Freedom</strong> to own foreign currency bank accounts 10.00 10.00 10.00 5.00 10.00 10.00 10.00<br />
Area 4. <strong>Freedom</strong> to Trade Internationally 5.24 5.29 7.15 6.98 6.77 7.19 7.10<br />
A. Tariffs 6.13 5.88 7.88 7.93 7.89 8.04 8.04<br />
(i) Revenue from trade taxes (% <strong>of</strong> trade sector) 8.07 (2.90) 8.39 (2.41) 9.65 (0.53) 9.38 (0.93) 9.48 (0.78) 9.33 (1.01) 9.33 (1.01)<br />
(ii) Mean tariff rate 4.20 (29.00) 5.94 (20.30) 9.65 (0.53) 8.70 (6.50) 8.64 (6.80) 8.62 (6.90) 8.62 (6.90)<br />
(iii) Standard deviation <strong>of</strong> tariff rates 3.32 (16.70) 5.68 (10.80) 5.72 (10.70) 5.54 (11.15) 6.16 (9.59) 6.16 (9.59)<br />
B. Regulatory trade barriers 5.91 6.30 6.29 6.14 5.33<br />
(i) Non-tariff trade barriers 3.82 6.41 5.53 5.16 6.69<br />
(ii) Compliance cost <strong>of</strong> importing and exporting 8.00 6.20 7.05 7.12 3.98<br />
C. Black-market exchange rates 9.60 10.00 10.00 10.00 10.00 10.00 10.00<br />
D. Controls <strong>of</strong> <strong>the</strong> movement <strong>of</strong> capital and people 0.00 0.00 4.83 3.70 2.91 4.60 5.02<br />
(i) Foreign ownership/investment restrictions 8.12 8.36 5.98 5.96 7.22<br />
(ii) Capital controls 0.00 0.00 1.54 1.54 1.54 1.54 1.54<br />
(iii) <strong>Freedom</strong> <strong>of</strong> foreigners to visit 1.20 1.22 6.29 6.29<br />
Area 5. Regulation 4.05 5.17 5.94 6.19 6.29 6.25 6.30<br />
A. Credit Market regulations 3.18 7.08 7.41 8.32 8.15 8.10 8.10<br />
(i) Ownership <strong>of</strong> banks 0.00 2.00 5.00 5.00 5.00 5.00 5.00<br />
(ii) Private sector credit 7.53 9.25 7.22 9.95 9.46 9.29 9.30<br />
(iii) Interest rate controls (negative real interest rates) 2.00 10.00 10.00 10.00 10.00 10.00 10.00<br />
B. Labor Market regulations 4.97 4.93 4.66 4.54 4.64<br />
(i) Hiring regulations and minimum wage 4.62 2.80 2.23 1.10 1.10<br />
(ii) Hiring and firing regulations 5.56 3.20 4.49 5.28 5.48 5.54<br />
(iii) Centralized collective bargaining 6.18 7.30 5.47 5.67 6.20<br />
(iv) Hours regulations 5.85 10.00 10.00 10.00 10.00<br />
(v) Mandated cost <strong>of</strong> worker dismissal 0.00 0.00 0.00 0.00<br />
(vi) Conscription 3.00 0.00 5.00 5.00 5.00 5.00 5.00<br />
C. Business regulations 5.45 5.31 6.07 6.12 6.16<br />
(i) Administrative requirements 6.95 6.26 4.28 4.99 4.64<br />
(ii) Bureaucracy costs 5.30 5.85 4.77 4.77 4.77<br />
(iii) Starting a business 5.63 5.85 8.22 7.98 8.16<br />
(iv) Extra payments/bribes/favoritism 3.91 3.13 3.95 4.37 4.51<br />
(v) Licensing restrictions 7.24 8.15 7.47 7.48<br />
(vi) Cost <strong>of</strong> tax compliance 3.54 7.02 7.16 7.38<br />
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