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Global Competitiveness Report 2015-2016 released by World Economic Forum

Oct 1, 2015 11:30 IST

World Economic Forum (WEF) on 30 September 2015 released the Global Competitiveness Report (GCR) 2015-2016. The report assesses the competitiveness landscape of 140 economies, providing insight into the drivers of their productivity and prosperity and it remains the most comprehensive assessment of national competitiveness worldwide.

The report says that failure to embrace long-term structural reforms that boost productivity and free up entrepreneurial talent is harming the global economy’s ability to improve living standards, solve persistently high unemployment and generate adequate resilience for future economic downturns.

The Global Competitiveness Report 2015-2016 finds countries need higher productivity to address sluggish global growth and persistent high unemployment and failure to boost competitiveness is compromising resilience to recession and other shocks

The report highlights that after five years of decline, India jumped 16 ranks to 55th place compared to 71st rank in 2014-15 report.

Top 10 countries in ranking

 

Economy

Score

Previous ranking

Switzerland

5.76

1

Singapore

5.68

2

United States

5.61

3

Germany

5.53

5

Netherlands

5.50

8

Japan

5.47

6

Hong Kong (SAR)

5.46

7

Finland

5.45

4

Sweden

5.43

10

United Kingdom

5.43

9

Larger Emerging Countries: The trend is for the most part one of decline or stagnation. However, there are bright spots: India ends five years of decline with a spectacular 16-place jump to 55th. South Africa re-enters the top 50, progressing seven places to 49th. Elsewhere, macroeconomic instability and loss of trust in public institutions drag down Turkey (51st), as well as Brazil (75th), which posts one of the largest falls. China, holding steady at 28, remains by far the most competitive of this group of economies. However, its lack of progress moving up the ranking shows the challenges it faces in transitioning its economy.

Middle East: It reports that there is a mixed picture in Middle East. Qatar (14th) leads the region, ahead of the United Arab Emirates (17th), although it remains more at risk than its neighbour to continued low energy prices, as its economy is less diversified. It says that with geopolitical conflict and terrorism threatening to take an even bigger toll, countries in the region must focus on reforming the business environment and strengthening the private sector.

Report on India
• It says that after five years of decline, India was able to jump 16 ranks and was positioned at the 55th place. It praises Prime Minister Narendra Modi for this dramatic reversal by saying that his pro-business, pro-growth, and anti-corruption stance has improved the business community’s sentiment toward the government.
• The quality of India’s institutions is judged more favorably (60th, up 10), although business leaders still consider corruption to be the biggest obstacle to doing business in the country.
• India’s performance in the macroeconomic stability pillar has improved, although the situation remains worrisome (91st, up 10). This macroeconomic stability was achieved due to lower commodity prices, inflation that eased to 6 percent in 2014, down from near double-digit levels the previous year.
• The government budget deficit has gradually dropped since its 2008 peak, although it still amounted to 7 percent of GDP in 2014, one of the world’s highest (131st).
• Infrastructure has improved (81st, up six) but remains a major growth bottleneck—electricity in particular.
• India remains one of the least digitally connected countries in the world (120th, up one). Fewer than one in five Indians access the Internet on a regular basis, and fewer than two in five are estimated to own even a basic cell phone.
• The fact that the most notable improvements are in the basic drivers of competitiveness bodes well for the future, especially the development of the manufacturing sector. But other areas also deserve attention, including technological readiness.

Background
The Global Competitiveness Report’s competitiveness ranking is based on the Global Competitiveness Index (GCI), which was introduced by the World Economic Forum in 2004. Defining competitiveness as the set of institutions, policies and factors that determine the level of productivity of a country, GCI scores are calculated by drawing together country-level data covering 12 categories – the pillars of competitiveness – that collectively make up a comprehensive picture of a country’s competitiveness.

The 12 pillars 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.

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