SA climbs back into key WEF listing
South Africa is in the top 50 of the Global Competitiveness Report of the World Economic Forum.
|||Johannesburg - South Africa is in the top 50 once more of the Global Competitiveness Report of the World Economic Forum (WEF), reversing a four-year downward trend with an impressive seven-place jump.
In the 2015/16 report released today, South Africa leapt to 49 among 140 countries assessed, up from 53 in 2014/15.
However, Mauritius remained the sub-Saharan region’s most competitive economy at 46.
Switzerland retained its first place in the global competitiveness index for the seventh consecutive year.
Defining competitiveness as the set of institutions, policies and factors that determine the level of productivity in a country, the global scores are calculated by drawing together country-level data covering 12 categories – the pillars of competitiveness – that collectively give a comprehensive picture of a country’s competitiveness.
Twelve pillars
The 12 pillars 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.
South Africa’s climb was largely due to the increased uptake of information communication technology, especially higher internet bandwidth, and improvements in innovation (up by five places to 38th), which establish the economy as the region’s most innovative.
The country was also home to the continent’s most efficient financial market (38th), driven by strong domestic competition (28th) and an efficient transport infrastructure (29th).
It further benefited from strong institutions (38th), particularly property rights (24th) and a robust and independent legal framework.
The WEF said reducing corruption (76th) and the burden of government regulation (117th) and improving the security situation (102nd) would further improve institutions.
Weak points
It said South Africa also had to address its inefficient electricity supply (116th) and inflexible labour market (107th).
But more worrisome was health (128th) and the quality of education (120th), where higher secondary enrolment rates would not be enough to create skills needed for a competitive economy.
WEF economist Caroline Galvan said: “Our relative rankings are not a race as to who is more competitive. What South Africa needs to do is move towards a knowledge-driven economy.”
The report said seven years after the global financial crisis, the world economy was evolving against the background of the “new normal” of lower economic growth, lower productivity growth, and high unemployment.
Although overall prospects remained positive, growth was expected to remain below the levels recorded in previous decades in most developed economies and in many emerging markets.
The report said: “Growth prospects could still be derailed by the uncertainty fuelled by a slowdown in emerging markets, geopolitical tensions and conflicts around the world, as well as by the unfolding humanitarian crisis.”
The report said some positive developments, such as the rapid diffusion of information communication technologies, had given rise to new business models and bore great promise for a future wave of innovations that could drive growth.
The WEF said geographical patterns of growth continued to shift, with advanced economies gaining ground on emerging markets. In 2013, emerging markets grew almost four times as quickly as advanced economies; this year they are projected to be growing less than twice as quickly.
BUSINESS REPORT