SOUTH ASIAN ECONOMIC COMPETITIVENESS

By Janaki Blum, SARID, September 28, 2006

The Global Competitiveness Report 2006-2007, published by the Geneva-based World Economic Forum (WEF, http://www.weforum.org ) is an annual assessment of the comparative ability and performance of 125 world economies to sell and supply goods and/or services in the global marketplace. It is produced in collaboration with leading academics and a global network of 122 partner institutes such as the Centre for Policy Dialogue (CPD) in Bangladesh, the Confederation of Indian Industry, Centre for Economic Development & Administration (CEDA) in Nepal, the Pakistan Institute of Development Economics and the Institute of Policy Studies in Sri Lanka.

The rankings are compiled using an unusual methodology that fuses publicly available “hard” data with the WEF’s comprehensive annual Executive Opinion Survey. The latter was conducted to examine the range of factors that can affect an economy's business environment and development as it seeks to maintain economic growth, including the levels of judicial independence, protecting property rights, government favouritism in policy making and corruption..

This year Switzerland, Finland and Sweden became the top three most competitive economies in the world. Denmark, Singapore, the USA, Japan, Germany, the Netherlands and the UK made the top ten, with the USA falling from first place in 2005 to sixth place.

According to the Chief Economist and Director of the Global Competitiveness Network, Augusto Lopez-Claro, the top rankings demonstrate that enhancing competitiveness in an increasingly complex global economy requires a strategy that includes good infrastructure and institutions, and competent macroeconomic management allied to world-class educational attainment and a focus on technology and innovation.

In South Asia, Bangladesh, ranked 99th, is the only country that failed to retain its previous position (98th among 117 countries in 2005). Though the report sees its infrastructure and institutions as weak, it recognizes the country's improved macro-economic performance. Nepal, included for the first time, ranked 110th. India gained two places from last year to rank 43rd overall with persistent poverty, weak health infrastructure and a large public sector deficit offsetting advances in technological services. Pakistan gained three places from 2005 to rank 91st, while Sri Lanka gained one place to rank 79th.

Country                      Rank

Switzerland ................   1
Finland .................. ......2
Sweden ........................3
Denmark .......................4
Singapore .....................5
USA .............................6
Japan ...........................7
Germany...................... 8
Netherlands ................. 9
UK .............................10

Bangladesh  ................99
India ...........................43
Nepal ........................110
Pakistan .................... 91

Sri Lanka ....................79

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