The United States and Finland are the two most competitive economies in the world, according to a report by the World Economics Forum.
Finland is the most competitive economy in the world, followed by the United States, Sweden, Denmark and Taiwan respectively.
Highlights of The Report
- Finland is the most competitive economy holding first position in the Growth Competitiveness Index rankings due to a good all-round performance.
- The United States holds a commanding position in the technology area, but this is offset by some weakening in the quality of its public institutions and macroeconomic environment, particularly public finances, where the country ranks 50 among the 102 countries surveyed.
- Six European economies are ranked among the top ten (Finland (1), Sweden (3), Denmark (4), Switzerland (7), Iceland (8) and Norway(9)) with a notable good performance from the Scandinavian countries.
- The United Kingdom and Canada dropped on the list mainly due to a perceived decline in the quality of their public institutions.
- Germany and France show slight overall improvement driven by better public institutions and technology, despite macroeconomic difficulties, particularly on the budget side.
- Taiwan and Singapore, ranked 5th and 6th respectively, are Asia’s best performing economies. Taiwan’s position is largely due to its excellent performance in technology and Singapore’s to its sound macroeconomic environment and quality of public institutions.
- Japan’s move up in the rankings, now in 11th place, is partly driven by its strength in technology, in particular in technical innovation. The Republic of Korea, however, now in the top 20 (in 18th place) is slowly catching up with Japan due to signs of an improving macroeconomic environment and technology.
- Jordan (34th) shows significant strength in all areas, in particular in terms of public institutions, which is encouraging for the region.
- Botswana (36th) is Africa’s best performing economy showing progress in most areas, except for lower scores in innovation.
- Chile (28th) is the highest ranking economy in Latin America, way ahead of Mexico (47th), the second highest ranked economy in the region. Gradually, through a combination of good macroeconomic management and a broad range of institutional reforms Chile is joining the ranks of the most competitive economies in the world, effectively migrating, in a figurative sense, away from the economically troubled region.
- China falls in the rankings (now ranking 44) marked by a deterioration in the perceived quality of its public institutions, with substantially lower scores for such variables as the independence of its judiciary and an aggregate measure of corruption in the public sector.
- Russia still holds a low ranking (70), despite considerable improvements in its macroeconomic environment and technology. Russia is penalized, however, for remaining high inflation (rank of 93), inefficiencies in the banking system, and low scores in a broad range of institutional factors.
"The survey conducted by the Forum provides invaluable data on why some countries manage to stay competitive year after year, have a stable growth performance, and are successful in channeling the forces of globalization to boost the per capita income of their respective populations. Not surprisingly, beyond efficient macroeconomic management, the quality of public institutions matters a great deal and the more attention policy-makers give to making improvements in this area, the brighter the outlook. If there is one lesson to be drawn from our exercise, it is that the strength and coherence of government policies have an enormous bearing on a country’s ranking." said Dr Augusto Lopez-Claros, Chief Economist of the World Economic Forum.
"By providing detailed information on the economic conditions of nations worldwide, The Global Competitiveness Report is a contribution to enhancing our understanding of the key ingredients of economic growth and prosperity. By highlighting the strengths and weaknesses of an economy, policy-makers and business leaders are assisted in their decision-making, whether through the introduction of new economic measures or institutional reforms," notes Professor Klaus Schwab, Executive Chairman of the World Economic Forum
For more information about the Global Competitiveness Report 2003-2004, or visit the GCP Web site.