India has been ranked 30th for overall competitiveness in 2009,which is one position lower than that of the previous year, in the World Competitiveness Yearbook (WCY) brought out by the International Institute for Management Development (IMD). Among the 57 major countries compared, the United States still retains the title of the most competitive nation in the world followed by Hong Kong and Singapore at second and third positions respectively. India’s dip in rankings has now continued for the second consecutive year. Medium term trends show that though the rankings improved from a low of 33 in 2005 to 27 in 2006 and 2007 the Indian rankings have continued to deteriorate since then.
For the first time, IMD has also analysed the stress related factors of competitiveness to test the prospect of the economy, resilience of the government, and of business society to highlight which countries would fare better considering the global economic slowdown.
Denmark emerged as the most competitive nation in terms of stress test on competitiveness among the 57 countries. India stands at an enviable 13th position revealing the resilience of the Indian economy in handling the recent global recession. On the same score card China has been placed 5 positions below India at 18th position.
Important countries that improved their overall competitiveness rankings over the past year included Hong Kong (from 3 to 2), Denmark (6 to 5), Sweden (9 to 6), Finland (15 to 9), Germany (16 to 13), New Zealand (18 to 15), Japan (22 to 17) and Malaysia (19 to 18). However the ranking deteriorated for countries like Singapore (from 2 to 3), Luxembourg (5 to 12), Austria (14 to 16), Ireland (12 to 19) and China (17 to 20). Countries with stable rankings during the period included USA (1) Switzerland (4), Australia (7), Canada (8) and Netherlands (14).
In the case of individual factor rankings, two of the four individual factor rankings of India improved during 2009 while the other two factors showed decline. The improvements were visible in the case of economic performance, where the country gained six positions as compared to 2008, going up from the 18 th rank to 12 th rank. However, the levels are still below the peak level of 7 attained in 2006.
Similarly, for business efficiency factor India gained from 20 th rank in 2008 to 11 th rank in 2009. The sudden improvement in India’s business efficiency is remarkable as the ranking has generally remained stable in the previous four years.
However in the case of government efficiency, India’s rank dipped from 23 rd rank in 2008 to 35 th rank in 2009. This is rather disappointing as the improvements in the previous year had reversed the deteriorating trends in the earlier years. It was also seen that infrastructure still remains a major problem area as far as competitiveness is concerned as India’s rank declined from 49th rank in 2008 to last 57th rank in 2009. The trends reveal that infrastructure ranking has steadily declined over the last four years from a peak level of 46 in 2005.
The report also cites the 15 biggest improvements in the Indian economy in2009. They include flow of foreign direct investment abroad, stock market capitalization, inward foreign direct investment flows, growth of mobile telephone networks, exports of goods and services, health infrastructure, availability of competent senior managers, improvement in budgets, growth of computers, ensuring future energy supply and energy infrastructure.
However, these gains were neutralized to some extent by the declining environment in important areas like current account balances, consumer price inflation, decline in real per capita GDP growth, long term unemployment trends, deteriorating perceptions about the fiscal management, tax evasion, parallel economy, corruption and auditing and accounting practices among others.
The overall competitiveness landscape that pushed the US to the first of the global ranking was enabled by a cross section of factors. The US fared first in terms of domestic economy, productivity and efficiency, technological infrastructure and scientific infrastructure. Other areas where the US excelled with high rankings included international investment (2), prices (3), basic infrastructure (4), international trade (10), business legislation (14), societal framework (14), employment (16), finance (16), institutional framework (17), health and environment (17), education (19), size labour market (20), attitudes and values (21). The US ranking was lowest in factors relating to public finance (51), management practices (34) and fiscal policy (28).
India’s advantages in the competitiveness landscape was the highest in labour market size (1), followed by attitudes and values (8), domestic economy (3), finance (13), employment (14), fiscal policy (15), prices (17), international investments (18), management practices (22), productivity and efficiency (28) and international trade (29). But the country’s ranking dipped below 30 in areas like education (57), health and environment (57), business legislation (42), societal framework (39), basic infrastructure (37), technological infrastructure (37), public finance (33) and scientific infrastructure (32).
In contrast the Chinese competitiveness landscape was sturdier with the ranking being highest in public finance (1), employment (2), domestic economy (2), international trade (5), scientific infrastructure (6), labour market (8), basic infrastructure (16), technological infrastructure (21), prices (22), fiscal policy (24) and societal framework (27). The relatively weaker areas included health and environment (53), management practices (51), education (49), business legislation (43), finance (42), productivity and efficiency (35) and international investment (31).
The findings of the IMD World Competitiveness Yearbook (WCY), have to be taken seriously as it is reputed for being the worldwide reference point on the competitiveness of nations and analyzing how an economy manages the totality of its resources and competencies to increase prosperity.
SOURCE:FINANCIAL EXPRESS
For the first time, IMD has also analysed the stress related factors of competitiveness to test the prospect of the economy, resilience of the government, and of business society to highlight which countries would fare better considering the global economic slowdown.
Denmark emerged as the most competitive nation in terms of stress test on competitiveness among the 57 countries. India stands at an enviable 13th position revealing the resilience of the Indian economy in handling the recent global recession. On the same score card China has been placed 5 positions below India at 18th position.
Important countries that improved their overall competitiveness rankings over the past year included Hong Kong (from 3 to 2), Denmark (6 to 5), Sweden (9 to 6), Finland (15 to 9), Germany (16 to 13), New Zealand (18 to 15), Japan (22 to 17) and Malaysia (19 to 18). However the ranking deteriorated for countries like Singapore (from 2 to 3), Luxembourg (5 to 12), Austria (14 to 16), Ireland (12 to 19) and China (17 to 20). Countries with stable rankings during the period included USA (1) Switzerland (4), Australia (7), Canada (8) and Netherlands (14).
In the case of individual factor rankings, two of the four individual factor rankings of India improved during 2009 while the other two factors showed decline. The improvements were visible in the case of economic performance, where the country gained six positions as compared to 2008, going up from the 18 th rank to 12 th rank. However, the levels are still below the peak level of 7 attained in 2006.
Similarly, for business efficiency factor India gained from 20 th rank in 2008 to 11 th rank in 2009. The sudden improvement in India’s business efficiency is remarkable as the ranking has generally remained stable in the previous four years.
However in the case of government efficiency, India’s rank dipped from 23 rd rank in 2008 to 35 th rank in 2009. This is rather disappointing as the improvements in the previous year had reversed the deteriorating trends in the earlier years. It was also seen that infrastructure still remains a major problem area as far as competitiveness is concerned as India’s rank declined from 49th rank in 2008 to last 57th rank in 2009. The trends reveal that infrastructure ranking has steadily declined over the last four years from a peak level of 46 in 2005.
The report also cites the 15 biggest improvements in the Indian economy in2009. They include flow of foreign direct investment abroad, stock market capitalization, inward foreign direct investment flows, growth of mobile telephone networks, exports of goods and services, health infrastructure, availability of competent senior managers, improvement in budgets, growth of computers, ensuring future energy supply and energy infrastructure.
However, these gains were neutralized to some extent by the declining environment in important areas like current account balances, consumer price inflation, decline in real per capita GDP growth, long term unemployment trends, deteriorating perceptions about the fiscal management, tax evasion, parallel economy, corruption and auditing and accounting practices among others.
The overall competitiveness landscape that pushed the US to the first of the global ranking was enabled by a cross section of factors. The US fared first in terms of domestic economy, productivity and efficiency, technological infrastructure and scientific infrastructure. Other areas where the US excelled with high rankings included international investment (2), prices (3), basic infrastructure (4), international trade (10), business legislation (14), societal framework (14), employment (16), finance (16), institutional framework (17), health and environment (17), education (19), size labour market (20), attitudes and values (21). The US ranking was lowest in factors relating to public finance (51), management practices (34) and fiscal policy (28).
India’s advantages in the competitiveness landscape was the highest in labour market size (1), followed by attitudes and values (8), domestic economy (3), finance (13), employment (14), fiscal policy (15), prices (17), international investments (18), management practices (22), productivity and efficiency (28) and international trade (29). But the country’s ranking dipped below 30 in areas like education (57), health and environment (57), business legislation (42), societal framework (39), basic infrastructure (37), technological infrastructure (37), public finance (33) and scientific infrastructure (32).
In contrast the Chinese competitiveness landscape was sturdier with the ranking being highest in public finance (1), employment (2), domestic economy (2), international trade (5), scientific infrastructure (6), labour market (8), basic infrastructure (16), technological infrastructure (21), prices (22), fiscal policy (24) and societal framework (27). The relatively weaker areas included health and environment (53), management practices (51), education (49), business legislation (43), finance (42), productivity and efficiency (35) and international investment (31).
The findings of the IMD World Competitiveness Yearbook (WCY), have to be taken seriously as it is reputed for being the worldwide reference point on the competitiveness of nations and analyzing how an economy manages the totality of its resources and competencies to increase prosperity.
SOURCE:FINANCIAL EXPRESS