Out-Law News | 10 Sep 2014 | 12:40 pm | 2 min. read
Switzerland and Singapore continue to top global economic competitiveness rankings published annually by the World Economic Forum (WEF), the not-for-profit international organisation behind the annual economic conferences in Davos, Switzerland. The United States, up from fifth to third place; Japan, up from ninth to sixth place; and the UK, up from 10th to ninth place; all improved their overall rankings in this year's report.
However, the quality of the UK's infrastructure continues to rank below that of many of its competitors, according to the report. Its performance improved slightly this year to 27th, up from 28th in last year's report; but still well below the quality of infrastructure in countries including Switzerland, Hong Kong, the United Arab Emirates, Finland and Singapore. According to the report, access to bank loans and complex tax rates remain the biggest barrier to doing business in the UK.
WEF has tracked the competitiveness of the different world economies since 2004. Countries are ranked against 12 categories, or "pillars", which when taken together make up a comprehensive picture of a country's competitiveness. These are institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication and innovation. Its 2014/15 report ranked 144 national economies.
According to WEF, the leading economies on its list all had "a track record in developing, accessing and utilising available talent, as well as in making investments that boost innovation". It also praised countries including the US, Japan and UK for their "extraordinary and bold monetary policies", although it warned that as the economy improved "a normalisation of monetary policy with tightening financial conditions could have an impact on both advanced and emerging economies".
WEF founder Klaus Schwab said the strained geopolitical situation, the rise of income inequality and potential tightening of public and private spending "could put the still tentative recovery at risk and call for structural reforms to ensure more sustainable and inclusive growth".
According to the report, some of the world's largest emerging market economies are struggling to improve their competitiveness. Only China, which moved up by one place to number 28 and is the highest-ranked of the so-called BRICS economies, registered an improvement this year. Saudi Arabia, at 24th; Turkey, at 45th; South Africa, at 56th; Brazil, at 57th; Mexico, at 61st; India, at 71st' and Nigeria, at 128th; all fell in the rankings.
In Asia, counties in the south eastern part of the region all improved in the rankings, with the Philippines, at number 52, showing the biggest improvement overall since 2010. Countries in south Asia fell behind, with only India featuring in the top half of the rankings. The report also found a widening divide between countries in the "highly competitive" north of Europe and those in the south and east; with an additional gap between "countries implementing reforms and those that are not".
The report found a "mixed picture" in the Middle East and North Africa, regions particularly affected by geopolitical instability, WEF said. The UAE and Qatar ranked in 12th and 16th places respectively, in "stark contrast" to North Africa where the highest placed country was Morocco, at 72nd. Sub-Saharan Africa continued to "register impressive growth rates close to 5%", said WEF, although it added that these countries needed to "move towards more productive activities" and improve infrastructure if this momentum was to continue.