SA 42nd most competitive: WEF
29 September 2005
South Africa slipped one place in the World Economic Forum's (WEF's) Global Competitiveness Report 2005, released this week, dropping to 42nd out of 117 countries surveyed from 41st in 2004.
Tunisia, in 40th position, is the only African country to rank higher than South Africa; others that fared well include Botswana (48), Mauritius (52) and Ghana (59).
Finland remains the most competitive economy in the world by WEF standards for the third consecutive year, with the United States in second position, followed by Sweden, Denmark, Taiwan and Singapore.
China and India, despite excellent growth performances in recent years, were only ranked 49th and 50th respectively on account of "institutional weaknesses" relating to judicial independence, property rights and government favouritism, Business Day reports.
The WEF's annual report, now in its 26th year, is based on a combination of publicly available data on 117 economies, and the results of an executive opinion survey involving nearly 11 000 business leaders worldwide.
The survey covers the key determinants of sustained economic growth, with a strong focus on countries' macroeconomic environment, quality of public institutions underpinning development, and level of technological readiness and innovation.
According to Business Day, while South Africa's macroeconomic policies were praised, the country fell one place in the overall rankings mainly because of the business community's concern about crime and the country's tardiness in adopting new information technologies.
The survey was conducted before the release of the latest official statistics showing a decline in crime over the last year, Business Day noted.
South Africa also needed to strengthen its effort "to raise the levels of training and skills of the labour force," the WEF said.
Competitiveness 'about productivity'
"Competitiveness is
fundamentally determined by the productivity of an economy," said one of the report's three authors, Michael Porter of the Harvard Business School.
"Productivity determines the wages you can afford to pay, productivity determines the returns to capital that you will enjoy on investment," Porter said.
"A productive country can be a wealthy country and an unproductive country is going to be a poor country.
"And the more economies can become productive, the more the overall world economy can grow and prosperity can grow across the board."
Global risks
WEF executive chairman Klaus Schwab said the report could help policy-makers see the relative strengths and weaknesses of their economy.
"Policy-makers are presently struggling with ways of intelligently managing global risks, while preparing their economies to perform well in an economic landscape characterised by growing complexity," Schwab said.
"The Global Competitiveness Report is a contribution to enhancing our understanding of the key ingredients of economic growth and prosperity."
SouthAfrica.info reporter
