Pakistan ranks at the 118th position in the world as far as competitiveness, innovation and business environment are concerned while Switzerland tops the overall ranking, says Global Competitiveness Report 2011-12, released by the World Economic Forum on Wednesday.
The World Economic Forum’s Centre for Global Competitiveness and Performance through its Global Competitiveness Report aims to mirror the business operating environment and competitiveness of 133 economies of the world. The report series identifies advantages as well as impediments to national growth thereby offering a unique benchmarking tool to the public and private sectors as well as academia and civil society.
Global Competitiveness Index:
The report ranks world nations according to the Global Competitiveness Index (GCI). It notes that as a nation develops, wages tend to increase, and that in order to sustain this higher income, labour productivity must be improved in order to make the nation competitive. Thus, the GCI separates countries into three specific stages: factor-driven, efficiency-driven, and innovation-driven, each implying a growing degree of complexity in the operation of the economy.
Pakistan (118th) partially bounces back from last year’s significant drop in rank (123rd). Yet, in several categories, it still requires improvements in performance amongst the developing Asian region. Pakistan particularly needs to concentrate on the most basic areas of competitiveness including institutions, infrastructure, health and primary education and the macroeconomic environment.
Improved ranking due to CSF efforts:
Competitiveness Support Fund (CSF) is a partner institution of the World Economic Forum in Pakistan on the Global Competitiveness Network. CSF, a joint initiative of the United States Agency for International Development (USAID) and the Ministry of Finance, Government of Pakistan has identified that Pakistan will have to decrease regulatory rigidities in the labour market and reduce barriers to domestic and foreign competition in order to render the markets for goods and services more efficient. CSF Chief Executive Officer Shahab Khawaja said that Pakistan is facing multiple challenges on its economic, security and globalisation fronts; however the policy-makers must not lose sight of long-term competitiveness fundamentals. For the recovery to be put on a more stable footing, Pakistan must ensure that growth is based on productivity enhancements. He said that the economy is struggling with fiscal challenges and anemic growth; it needs to focus on competitiveness-enhancing measures in order to create a virtuous cycle of growth and ensure solid economic recovery. “This year’s improvement in ranking also shows the continuous efforts that the CSF has been putting in identifying and advising the government on key critical factors to improve competitiveness and economic growth in Pakistan”, said Shahab Khawaja adding that boosting the technological adoption of firms and the public at large would allow for considerable productivity enhancements in the country. Switzerland tops the overall rankings in The Global Competitiveness Report while Singapore overtakes Sweden at the second position. Northern and Western European countries dominate the top 10 with Sweden 3rd, Finland 4th, Germany 6th, the Netherlands 7th, Denmark 8th and the United Kingdom 10th. Japan remains the second-ranked Asian economy at 9th place, despite falling three places since last year.
Factors behind the ranking:
The Global Competitiveness Report’s ranking is based on the Global Competitiveness Index (GCI), developed for the World Economic Forum by Sala-i-Martin and introduced in 2004. The GCI comprises 12 categories – the pillars of competitiveness – which together provide a comprehensive picture of a country’s competitiveness landscape. The pillars on which the ranking is measured 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. This year, over 14,000 business leaders were polled in a record 142 economies. The survey is designed to capture a broad range of factors affecting an economy’s business climate. The report contains an extensive data section with a detailed profile for each of the 142 economies featured in the study, providing a comprehensive summary of the overall position in the rankings, as well as data tables with global rankings for over 110 indicators.
