The Institute for Management Development (IMD) has published its World Competitiveness Yearbook, providing a global reference point on the competitiveness of countries.
The yearbook provides extensive coverage of 64 economies, including South Africa. It analyzes and ranks countries according to how they manage their competencies to achieve long-term value creation.
“An economy’s competitiveness cannot be reduced only to GDP and productivity because enterprises also have to cope with political, social and cultural dimensions. Governments, therefore, need to provide an environment characterized by efficient infrastructures, institutions and policies that encourage sustainable value creation by the enterprises,” the IMD said.
Switzerland ranked as the top country for the first time, in a year that reflected the impact of the Covid-19 pandemic on economic competitiveness, the IMD said.
“Switzerland has been competing with Singapore in recent years but the latter has suffered significantly on an economic level during the pandemic, as it depends on the export and import of services and people’s mobility,” the report’s authors said.
Switzerland enjoys the benefits of being a European country but finds agility in its lack of European Union membership. Other European countries that topped the ranking found success by either being outside of the EU or at least of the eurozone.
Sweden placed second, up from sixth, with Denmark in third spot (second in 2020) in a shakeup that saw European economies weather the health crisis better than most other regions, the IMD said. Completing the top five were the Netherlands followed by Singapore.
The latest rankings exposed the economic impact of the pandemic across the globe. The report found that qualities such as investment in innovation, digitalization, welfare benefits and leadership resulting in social cohesion helped economies better weather the crisis.
One major trend revealed in this year’s results is that countries that had built themselves a certain economic buffer before the pandemic fared better and that this was despite their infection levels, the IMD said.
Economic prowess despite infection levels is also seen in the positions of the United States, which maintained its 10th position, while the United Kingdom moved up one spot to 18th.
South Africa continued its slide down the rankings, to 62nd from 59th a year ago. It ranks below newcomer to the list, Botswana, and only above Argentina, and Venezuela.
The country ranked 53rd in 2017. The IMD said that challenges for the country in 2021 include:
- The deteriorating headline and youth unemployment;
- Rising public debt levels amid a shrinking fiscal space;
- Lack of decisive plans to revive the struggling economy;
- Ongoing electricity supply problems and rolling blackouts;
- A slow vaccination rate, slowing the post-Covid-19 recovery.
Competitiveness landscape
The criteria below highlight the 15 biggest improvements and the 15 biggest declines in the overall performance of the economy. They are determined by the largest percentage changes in the value of each criterion from one yearbook to the next.
From a list of 15 indicators, respondents of an executive opinion survey were asked to select what they perceived as the key attractiveness factors of their economy. The chart below shows the percentage of responses per indicator from the highest number of responses to the lowest for South Africa.
The World Competitiveness Ranking is based on 334 competitiveness criteria selected as a result of comprehensive research using economic literature, international, national and regional sources and feedback from the business community, government agencies and academics.
Read: Third quarter warning for South Africa as price hikes expected to bite consumers
Leave a Comment