Switzerland Tops Competitiveness League

by Mike Godfrey, Tax-News.com, Washington

13 September 2010

Switzerland has claimed top spot in the Global Competitiveness Report 2010-2011, released by the World Economic Forum (WEF) on September 9. In the rankings, the United States has fallen two places to fourth position, overtaken by Sweden (2nd) and Singapore (3rd), after ceding the top place to Switzerland last year.

Rationalizing the United States’ decline in terms of ‘global competitiveness’, the WEF stated that “in addition to the macroeconomic imbalances that have been building up over time, there has been a weakening of the United States’ public and private institutions, as well as lingering concerns about the state of its financial markets.”

The Nordic countries continue to be well positioned in the ranking, with Sweden (2nd), Finland (7th) and Denmark (9th) among the top 10, and with Norway at 14th. Sweden overtakes the US and Singapore this year to be placed 2nd overall. The United Kingdom, after falling in the rankings over recent years, gains a single place to 12th position.

The People’s Republic of China (27th) continues to lead the way among large developing economies, improving by two more places this year, and solidifying its place among the top 30. The three other BRIC economies, Brazil (58th), India (51st) and Russia (63rd), remained stable. Several Asian economies have performed strongly, with Japan (6th) and Hong Kong SAR (11th) also in the top 20. In Latin America, Chile (30th) is the highest ranked country, followed by Panama (53rd), Costa Rica (56th) and Brazil (58th).

Several countries from the Middle East and North Africa region occupy the upper half of the rankings, led by Qatar (17th), Saudi Arabia (21st), Israel (24th), United Arab Emirates (25th), Tunisia (32nd), Kuwait (35th) and Bahrain (37th), with most Gulf States continuing their upward trend of recent years. In sub-Saharan Africa, South Africa (54th) and Mauritius (55th) feature in the top half of the rankings, followed by second-tier best regional performers Namibia (74th), Botswana (76th) and Rwanda (80th).

Commenting, the WEF Founder and Executive Chairman, Klaus Schwab said: “Policymakers are struggling to find ways of managing the present economic challenges while preparing their economies to perform well in a future economic landscape, characterized by uncertainty and shifting balances. In such a global economic environment, it is more important than ever for countries to put into place the fundamentals underpinning economic growth and development.”

Xavier Sala-i-Martin, Professor of Economics, Columbia University, US, and co-author of the report, added: “Amid concerns about the outlook for the global economy, policy-makers must not lose sight of long-term competitiveness fundamentals amid short-term challenges. For economies to remain competitive, they must ensure that they have in place those factors driving the productivity enhancements on which their present and future prosperity is built. A competitiveness-supporting economic environment can help national economies to weather business cycle downturns and ensure that the mechanisms enabling solid economic performance, going into the future, are in place.”

The competitiveness ranking is based on the Global Competitiveness Index (GCI), developed for the World Economic Forum by Sala-i-Martin and introduced in 2004. The GCI is based on 12 pillars of competitiveness, providing a comprehensive picture of the competitiveness landscape in countries around the world at all stages of development. The pillars are: institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication, and innovation.

The rankings are calculated from both publicly available data and the annual Executive Opinion Survey, conducted by the World Economic Forum together with its network of Partner Institutes (leading research institutes and business organizations) in the countries covered by the study. This year, over 13,500 business leaders were polled in 139 economies. The survey is designed to capture a broad range of factors affecting an economy’s business climate. The report also includes comprehensive listings of the main strengths and weaknesses of countries, making it possible to identify key priorities for policy reform.

Recommended