By THE NATION
The top 10 remain dominated by European countries – Switzerland, Finland, Sweden, the Netherlands, Germany and the United Kingdom. Three Asian economies also figure in top 10, with Singapore remaining the second-most-competitive economy in the world, and Hong Kong and Japan placing ninth and 10th.
Among Asean countries, Thailand ranks ahead of Indonesia (50th), Philippines (65th) and Vietnam (75th) but behind Malaysia (25th), according to this year’s GCI report published by the World Economic Forum.
Yet the competitiveness challenges facing the Kingdom remain considerable. Political and policy instability, excessive red tape, pervasive corruption, security concerns, and uncertainty around property-rights protection seriously undermine the quality of the institutional framework on which businesses rely heavily, the WEF says.
The country loses 10 places this year in this “institutional framework” category to rank a low 77th. Poor public health (71st) and basic education standards (89th), two other critical building blocks of competitiveness, require urgent attention, says the report. Turning to more sophisticated areas, which are just as important given Thailand’s stage of development, technological adoption is generally poor (84th).
Less than a quarter of the population accesses the Internet on a regular basis, and only a small fraction has access to broadband.
On a more positive note, the macroeconomic environment continues to improve – albeit marginally (27th, up one spot) – as the budget deficit was reduced to less than 2 per cent of gross domestic product and the debt-to-GDP ratio dropped to 42 per cent in 2011.
Malaysia maintains its score but drops four places as other economies move ahead. The most notable advantages are found in Malaysia’s efficient and competitive market for goods and services (11th) and its remarkably supportive financial sector (sixth), as well as its business-friendly institutional framework.
Indonesia drops four places in this year’s edition, but maintains its score and remains in the top 50 of the GCI. The country remains one of the best performers among the eight Asean members analysed in the WEF report.
Ranked 65th, the Philippines is one of the countries showing the most improvement in this year’s edition. Indeed, it has advanced 22 places since reaching its lowest mark in 2009.
The Philippines makes important strides this year in improving competitiveness – albeit often from a very low base – especially with respect to its public institutions (94th, up 23 places).
Vietnam ranks 75th this year and switches positions with the Philippines. Over the last two editions, Vietnam has lost 16 places and is now the second-lowest-ranked among the eight Asean members analysed. The country loses ground in nine of the 12 pillars of the GCI. It ranks below 50th in all of the pillars, and dangerously close to the 100th position in most of them.
Inflation approached 20 per cent last year, twice the level of 2010, and the country’s sovereign debt rating worsened.
Singapore retains its place at second position overall as a result of an outstanding performance across the entire index. Taiwan maintains its 13th position for the third year in a row. Its competitiveness profile is in essence unchanged and consistently strong. South Korea (19th) advances five positions thanks to improvement of infrastructure and a budget surplus above of 2 per cent of GDP.
Meanwhile, China (29th) loses some ground in this year’s edition of the report, because of some critical areas for its competitiveness such as financial-market development, technological readiness, and market efficiency.
The ranking is annually measured by the WEF, covering a number of selected economies in five regions: Europe and North America, Asia and the Pacific, Latin America and the Caribbean, the Middle East and North Africa, and sub-Saharan Africa.