SYDNEY—Singapore led Asian countries to rank second in the world behind Switzerland in the World Economic Forum’s latest survey of global competitiveness, which showed developing nations narrowing the gap with established economies across a range of measures from infrastructure to governance.
Singapore climbed one place from its rank last year. Other regional economies in the top 20 in the survey, published Wednesday, were Japan (ninth), Hong Kong (11th), Taiwan (13th) and Australia, which fell four places to 20th. The forum, also known as the WEF, assessed 142 economies for the 2010-11 Global Competitiveness Index. The landlocked Saharan state of Chad ranked last.
The annual survey by the Geneva-based organization considers 12 main criteria such as labor-market efficiency, financial-market development, infrastructure and education. It polled 14,000 business executives in 142 countries. According to the WEF, the results over the past several years show competitiveness stagnating in advanced economies as results improve among emerging markets, mirroring the trend in economic activity.
“We’re seeing a convergence among emerging and advanced economies,” says Jennifer Blanke, chief economist at the forum, in an interview. “The emerging markets are catching up, and there is a convergence of scores with the advanced economies.”
The survey is a further sign of the shift in the geography of the global economy, with fast-growing Asian nations better placed to invest in areas that improve competitiveness, such as infrastructure, while the U.S. and European states are focused on staving off recession or on austerity drives to cut ballooning debt.
China, the world’s second-largest economy, climbed one place in the survey to rank 26th—still far behind the U.S., which fell one place to fifth. China was the top-ranking of the BRICS nations, well ahead of Brazil, Russia, India and South Africa, whose rank ranged from 54th to 70th. The forum says China’s competitive performance was helped by strong economic growth, a high savings rate—equal to 53% of gross domestic product—and debt. These outweighed persistent problems with corruption and financial market development, according to the survey.
“Asia’s rise to economic prominence has been accompanied by a remarkable dynamism in terms of competitiveness,” the forum says in its report, with Singapore at the top in efficiency of government and freedom from corruption.
Like Australia, India lost ground in the latest survey. In Australia, the forum flagged a shortfall in business innovation as well as a weakness in the standard of infrastructure, especially around transportation networks and seaports under strain from the growing volume of trade in mining commodities. India, which dropped five places to 56th, also partly because of lagging infrastructure, is falling further behind China in competitiveness. The gap between the two nations has widened sixfold since 2006, according to the forum.
Top-ranked Switzerland scored high in areas such as transparent government, highly developed financial markets and R&D. The soaring Swiss franc, however, could put pressure on the country’s competitiveness in the future, Ms. Blanke said. “They will have to be even better at what they do,” she said. “But it could be a mechanism for enforcing even greater efficiency.”
Write to Andrew Critchlow at [email protected]
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By: Andrew Critchlow with a contribution from Deborah Ball
Source: The Wall Street Journal, Sept. 8, 2011
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