10 Provinces with the Lowest Business Competition in 2023

Economics & Macro

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Adi Ahdiat 13/06/2024 10:49 WIB

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According to KPPU data, West Papua had the lowest business competition index in Indonesia in 2023.

10 Indonesian Provinces with the Lowest Business Competition Index (2023)

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10 Provinces with the Lowest Business Competition in 2023

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10 Indonesian Provinces with the Lowest Business Competition Index (2023)

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Low business competition indicates that the market is dominated by only a few businesses. In this condition, producers can unilaterally set prices, harming consumers.

According to a report by the Indonesian Business Competition Supervisory Commission (KPPU), West Papua currently has the lowest level of business competition in Indonesia.

KPPU, together with the Center for Economics and Development Studies, Padjadjaran University (CEDS Unpad), measured the business competition index across all Indonesian provinces through a survey of various stakeholders.

Respondents included provincial-level representatives from the Department of Industry/Trade, the Indonesian Chamber of Commerce and Industry (Kadin), Bank Indonesia offices, and local academics.

The dimensions surveyed included industrial structure, behavior, and performance; supply and demand factors; and regulations and institutions related to business competition.

The survey results were then analyzed and formulated into a score on a scale of 1 to 7. A score of 1 indicates very low competition, while a score of 7 indicates very high competition.

Using this method, in 2023 West Papua achieved a business competition index score of 4.00, the lowest among other provinces.

"In general, most respondents stated that there are barriers to entering the market in West Papua Province. This is due to problems with licensing, capital, and hampered connectivity," said the CEDS Unpad team in their report.

"From the market performance side, based on price indicators, it is known that the prices of goods and services in West Papua Province are relatively more expensive than in surrounding areas. All respondents also stated that there are investment barriers in West Papua, especially problems with community resistance," they continued.

Other provinces with relatively low business competition nationally are Aceh, North Maluku, West Sulawesi, Jambi, Papua, Maluku, South Sulawesi, Central Kalimantan, and Gorontalo.

Although their scores are the lowest in Indonesia, the business competition index of these 10 provinces mostly falls into the "moderate" category, and some into the "slightly high" category.

The following are the business competition index score categories from KPPU and CEDS Unpad:

* Very High Competition: 6.51—7.00
* Fairly High Competition: 5.51—6.50
* Slightly High Competition: 4.51—5.50
* Moderate Competition: 3.51—4.50
* Slightly Low Competition: 2.51—3.50
* Fairly Low Competition: 1.51—2.50
* Very Low Competition: 0.00—1.50

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."

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10 Provinces with the Lowest Business Competition in 2023

10 Provinces with the Lowest Business Competition in 2023

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10 Provinces with the Lowest Business Competition in 2023

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