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October 8, 2008 1:27 pm
The US has again topped a widely-watched index ranking country competitiveness, despite the financial crisis that has left it and other highly ranked nations facing market meltdown and a prolonged economic downturn.
Switzerland, Denmark and Sweden retain their second, third and fourth places respectively in the league table compiled by the Geneva-based World Economic Forum.
Among the world’s economic heavyweights only two apart from the US feature in the top ten – Germany, ranked seventh and Japan, ranked ninth. The UK has dropped three places from ninth to twelfth. Singapore, Finland, the Netherlands and Canada take the remaining top ten places.
The WEF, whose rankings were compiled before the current market collapse, said the UK slippage was “mainly attributable to a weakening of its financial markets”, though they continued to be among the most efficient in the world.
Jennifer Blanke, director of the WEF’s global competitiveness network, said despite the present turmoil the index was still relevant because it measured a wide range of factors important for long-term growth in productivity and living standards.
“Once the global economy emerges from the current financial crisis, which it will, the countries that do well on our index are those that are best prepared to bounce back and perform well in the longer term,” she told the FT.
The WEF’s global competitiveness index this year rates 134 countries on 12 criteria which include quality of education, labour and product market flexibility, infrastructure, macroeconomic stability and “financial market sophistication”.
Like the rival index produced by the Swiss-based IMD business school, the WEF index relies heavily on the views of business executives as well as statistical data, and the rankings depend crucially on the weights given to the various factors.
This helps to explain some oddities in the WEF rankings. For instance, Qatar and Saudi Arabia are ranked above China (30), while now bankrupt Iceland (20) tops rich and solid Luxembourg (25).
The WEF says Gulf countries are moving up the competitiveness league helped by high oil revenues which have improved government finances, better institutions and a friendlier business environment.
Meanwhile, though China benefits from huge foreign and domestic markets, its overall score is dragged down by perceived inadequacies in financial regulation and corporate governance, among other things.
However, there are relatively few surprises at the bottom of the table, with Chad, Zimbabwe and Burundi vying for the least competitive spot.
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