March 8, 2021

U.S. Slides, Singapore Rises in Competitiveness Survey

LONDON — The United States is slipping and emerging markets are improving, but European economies still dominate the list of the most competitive economies in the world, according to a World Economic Forum report released Wednesday.

For the third consecutive year, Switzerland ranked first in the forum’s annual competitiveness survey
, which assesses countries based on 12 categories including innovation, infrastructure and the macro-economic environment.

The United States — which topped the list in 2008 — continued its decline, also for the third year in a row, falling one place to fifth position. The weaker performance was attributed to economic vulnerabilities as well as “some aspects of the United States’ institutional environment,” notably low public trust in politicians and concerns about government inefficiency.

Singapore overtook Sweden to claim the second position. But perhaps surprisingly, given the crisis of confidence that continues to plague the European financial system, Western European countries dominated survey’s top 10 economies.

Behind Sweden, Finland ranked fourth, Germany was sixth, followed by the Netherlands and Denmark. Britain was in tenth; France was 18th and indebted Greece slid to 90th.

The results show that while competitiveness in advanced economies has stagnated over recent years, it has improved in many emerging markets, helping their economies to become more robust and mirroring the shift in economic activity from the West to developing economies, the Geneva-based forum said.

“Much of the developing world is still seeing relatively strong growth, despite some risk of overheating, while most advanced economies continue to experience sluggish recovery, persistent unemployment and financial vulnerability, with no clear horizon for improvement,” Klaus Schwab, founder and chairman of the forum, said in a statement.

China, ranked 26th and up one place on a year earlier, was the highest placed of the large developing economies. Among the other major emerging economies, South Africa was 50th, Brazil 53rd, India 56th and Russia 66th.

Among major Asian economies, Japan ranked ninth and Hong Kong 11th.

Qatar was the highest ranked country in the Middle East, at 14th, followed by Saudi Arabia at 17th. The United Arab Emirates stood at 27th.

The rankings are calculated from both publicly available data and a survey of over 14,000 executives in 142 economies. Together they form an index, which was introduced in 2004.

The index takes account of 12 categories: institutions; infrastructure; economic environment; health and primary education; higher education and training; goods market efficiency; labor market efficiency; financial market development; technological readiness; market size; business sophistication; and innovation.

“For the recovery to be put on a more stable footing, emerging and developing economies must ensure that growth is based on productivity enhancements,” said Xavier Sala-i-Martin, a professor of economics, at Columbia University and co-author of the report. “Advanced economies, many of which struggle with fiscal challenges and anaemic growth, need to focus on competitiveness-enhancing measures in order to create a virtuous cycle of growth and ensure solid economic recovery.”

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