As the world economy continues its decline into what more and more economists are calling a global recession, all countries will be affected, some more than others. The questions remain: how deep will it be and how long will it last? Will some countries come out stronger while others tilt into bankruptcy? A global economic meltdown will have consequences for national competitiveness, which the IMD World Competitiveness Center defines as how a state manages its path to prosperity. This is a concept that not only encompasses economic performance, but also the impact on the environment, on quality of life and on economic and social infrastructures.

Global economic growth is estimated to fall to 0.5 per cent this year, down from 3.7 per cent last year and 5 per cent in 2007. Any global gross domestic product growth of less than 3 per cent generally implies a world recession, even if that does not mean that all countries are in decline. The majority of the rich industrialised countries have now entered a recessionary period and the emerging economies, which grew on average 7 to 8 per cent during the past few years, could slow to 3.3 per cent. Growth will be driven mainly by developing Asia. Compared with the contraction in growth of the rich industrialised economies, the developing economies may be better shielded from the global turmoil. But they will feel the pain as the world’s economic engines falter.