South Africa's competitiveness improves
21 May 2010
South Africa's economic competitiveness has improved for two years in a row, says Productivity SA – an indication of the resilience of the country's economy in the face of the global recession of 2009.
According to the organisation, the country's ranking has moved four notches higher, from 48th in 2009 to 44th this year out of a total of 58 selected countries. In 2008, South Africa was ranked 53rd.
The results are from the annual World Competitiveness Yearbook 2010, which is published by the Switzerland-based Institute of Management Development (IMD) and is recognised internationally as the leading survey of competitiveness between nations.
"South Africa's strong competitiveness is being linked to the increased level of portfolio investment assets and direct investment stocks inward, as investors divert their investments to emerging markets that were not too exposed to the financial crisis in a bid to protect their investments," said Productivity SA's Sello Mosai.
Four competitive factors
The IMD yearbook rates the ability of 58 industrialised and emerging economies, with country data evaluated through 327 criteria grouped into four competitiveness factors, namely economic performance, government efficiency, business efficiency and infrastructure.
South Africa's improvement, Mosai said, was due to better labour market flexibility, an improved current account balance, a better inflation outlook and the cost of living index.
However, Productivity SA cautioned that the country should be worried about a further decline in employment creation, exports and GDP in real terms due to the recession.
"There was also a reduction in business efficiency from 30th position to 31st position. Business efficiency was the only competitiveness factor where South Africa performed poorly as compared to the previous year," said Mosai. "It is extremely encouraging to see that South Africa performed well in the other three competitiveness factor."
Capital investment
Performance in government efficiency improved five places from 26th to 21st, while infrastructure improved by three places to 51st among the sampled countries.
"This shows that the investment of the South African government in energy, transportation and infrastructure development through its industrial and economic policies interventions is making progress."
South Africa performed better than Colombia, Mexico, Greece and Argentina, among other countries. However, the country performed poorly when compared to Australia (5), Malaysia (10), New Zealand (20) and Chile (28).
Source: BuaNews
