SA climbs competitiveness index
17 May 2005
South Africa improved its ranking by three places from 49th to 46th out of 60 economies rated in the latest World Competitiveness report compiled by the Swiss-based Institute for Management Development (IMD).
The annual report measures the relative competitiveness of 60 countries, using 314 criteria to rank economies in four major categories. South Africa was the only African economy to be rated.
SA was ranked first of all participating countries for price stability - one of the components determining economic performance - confirming the success of the SA Reserve Bank's policy of inflation rate targeting.
An improved economic performance ranking (to 42nd place) saw SA increase its overall competitiveness, despite a drop from 2004 in the rankings for business efficiency (to 40th place), government efficiency (34th) and infrastructure development (58th).
The country's economic performance ranking was supported by contributions from the
sub-categories of inward direct investment of stocks, and real growth in export of commercial services, where the country scored 2nd place.
Further strengthening factors included consumer price inflation (11th position), tourism receipts (17th) and export of goods (19th).
SA's government efficiency ranking was backed by high ratings in the sub-categories of fiscal policy (11th) and public finance (30th).
National Productivity Institute (NPI) chief economist Jan de Jager said that the country's improved international competitiveness was due to a continuous rise in productivity performance.
The NPI's research points to a 3.2% per annum increase in SA's private sector productivity since 1996.
According to De Jager, the more productive the economy becomes, the higher the personal income of workers and the lower the rate of inflation in the long run.
"When the economy increases its productivity levels it becomes more competitive and tends to lower
the rate of unemployment."
SouthAfrica.info reporter
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