JEDDAH — The USA remains at the top as a result of its strong business efficiency and financial sector, its innovation drive and the effectiveness of its infrastructure, the International Institute for Management Development (IMD) World Competitiveness Yearbook 2015 revealed. Hong Kong (2) and Singapore (3) move up overtaking Switzerland, which drops to fourth place. Canada (5), Norway (7), Denmark (8), Sweden (9) and Germany (10) remain in the top 10. Luxembourg moves to the top (6) from 11th place in 2014.
Qatar ranked (13) out of (61) mostly high-income countries in the International Institute for Management Development (IMD) World Competitiveness Yearbook 2015. This year's assessment confirms Qatar's strong performance across multiple fronts. The assessment is based on a range of statistical indicators and on opinions polled among local business leaders, giving a rounded view of the economy's competitive position.
Areas where Qatar ranked highly in the report included: economic performance (2), government efficiency (4) and business efficiency (11). Scope for improvement was identified in some areas, including infrastructure (47). This ranking has been positively influenced by a number of factors including: strong economic performance as represented by current account and trade surpluses, Qatar's low unemployment rate, and the solid growth of GDP. Other contributing factors were a strong surplus in the general budget and efficient financial management.
On the other hand, there were some areas where the report suggests some areas of improvements. These include lowering export concentration by product and partner, strengthening direct inward investment flows, increasing female labor force participation, strengthening high-tech exports and the share of renewables in total energy requirements.
Qatar Minister of Development Planning & Statistics Dr. Saleh Bin Mohammed Al Nabit said "these results confirm that our overall performance is solid and they will certainly help us to identify those areas where we need to consolidate gains and make further improvements". He added that, "Qatar's National Development Strategy sets out clear goals in the areas of business regulation, economic infrastructure, and private sector development that will lead to future advances. Qatar has no option but to diversify its economy. If it is to achieve this, we must continuously working to increase efficiency and productivity and improve our international competitiveness. These results show us where we need to redouble our efforts and improve further. The IMD findings will be carefully studied and, along with other evidence, will help us sharpen our efforts to bolster our economy further."
Results for Asia are mixed. Malaysia (12 to 14), Japan (21 to 27), Thailand (29 to 30) and Indonesia (37 to 42) move down. Taiwan (13 to 11), Republic of Korea (26 to 25) and the Philippines (42 to 41) slightly rise in the ranking. Most Asian economies in decline have seen a drop in their domestic economies and are impacted by weakening/aging infrastructure.
Eastern Europe experiences a mixture of results as well. Poland (36 to 33), the Czech Republic (33 to 29) and Slovenia (55 to 49) move up in the ranking. In the Baltic States, Estonia (30 to 31) and Latvia (35 to 43) rank lower than last year; although, Lithuania gains in the ranking (34 to 28). Elsewhere in the region, current events in Russia (38 to 45) and Ukraine (49 to 60) highlight the negative impact that armed conflict and the accompanying higher market volatility have on competitiveness in an increasingly interconnected international economy.
A pattern of decline is observed in Latin America. Chile moves from 31 to 35, Peru from 50 to 54, Argentina from 58 to 59 and Venezuela remains at the bottom of the table. Colombia stays at 51.
Among large emerging economies, Brazil (54 to 56) and South Africa (52 to 53) slightly drop, China (23 to 22) and Mexico (41 to 39) experience improvements while India remains at the same spot (44). This trend shows the difficulty in grouping emerging markets in one category, as the issues impacting their competitiveness differ. China's slight increase stems from improvements in education and public expenditure, whereas Brazil suffers from a drop in domestic economy and less optimistic executive opinions. The ranking highlights one particular commonality among the best ranking countries. Nine countries from the top 10 are also listed in the top 10 of the business efficiency factor.
Business efficiency focuses on the extent to which the national environment encourages enterprises to perform in an innovative, profitable and responsible manner. It is assessed through indicators related to productivity such as the labor market, finance, management practices and the attitudes and values that characterize the business environment.
"Simply put, business efficiency requires greater productivity and the competitiveness of countries is greatly linked to the ability of enterprises to remain profitable over time," said Professor Bris. "Increasing productivity remains a fundamental challenge for all countries."
Long-term business profitability and productivity are difficult to achieve because they are largely underpinned by the strategic efforts of companies striving to maximize positive externalities that originate in economic activities.
Luxembourg experiences one of the largest gains in this factor (14 to 4) which greatly contributes to its ascendency in the ranking. Qatar's improvement (19 to 13) in the ranking largely reflects its recovering in terms of the business efficiency factor (24 to 11) due to increases in its overall productivity. Greece's recovery (57 to 50) also comes on a strong performance in business efficiency in which it increases from 54 to 43. The UAE's drop (8 to 12) in the ranking is partly the result of lower scores (15 to 18) in the business factor. Similarly, Germany's retreat (6 to 10) is a reflection of its fall in business efficiency (9 to 16). Likewise Indonesia's decline in the ranking is accompanied by a steep drop in the business efficiency factor (22 to 34).
Mongolia is a new addition to the competitiveness ranking in 2015. Mongolia is a fast-growing country (11.6% GDP growth, 2013). Although, growth slowed to 5.3% in 2014 (data for the first half of the year), the country's economic performance remained strong. Growth is driven by mining and natural resources. — SG
