One decade and $10-trillion of fiscal stimulus on from the global financial crisis, the World Economic Forum’s ‘Global Competitiveness Report 2019’ has indicated that most economies are still locked in a cycle of low or flat productivity growth.
According to the report, economies that have channelled investments into human capital, improving institutions, innovation capability and business dynamism will be best placed to revive productivity and withstand a global slowdown.
Launched in 1979, the report provides a yearly assessment of the drivers of productivity and long-term economic growth.
This year, the report finds that, as monetary policies begin to run out of steam, it is crucial for economies to boost research and development (R&D), enhance the skills base of the current and future workforce, develop new infrastructure and integrate new technologies, among other measures.
With a score of 84.8 (+1.3), Singapore is the world’s most competitive economy.
The US is the second most competitive country and remains the most competitive large economy in the world.
The average across the 141 economies covered is 61 points.
This global competitiveness gap is noted as concerning, as the global economy faces the prospect of a downturn.
The changing geopolitical context and rising trade tensions are fuelling uncertainty and could precipitate a slowdown.
However, some of this year’s better performers in the global competitive index appear to be benefiting from the trade feud through trade diversion, including Singapore, and Vietnam at 67, the most improved country in this year’s index.
The report documents emerging areas of promising policies, reforms and incentives to build more sustainable and inclusive economies. To manage the transition to a greener economy, the report recommends four key areas of action, namely engaging in openness and international collaboration, updating carbon taxes and subsidies, creating incentives for R&D, and implementing green public procurement.
To foster shared prosperity, the report recommends four additional areas of action, namely increasing equality of opportunity, fostering fair competition, updating tax systems and their composition, as well as social protection measures, and fostering competitiveness-enhancing investments.
REGIONAL & COUNTRIES
Among the Brazil, Russia, India, China and South Africa countries, China was the highest ranked at twenty-eighth.
Led by Mauritius at 52, sub-Saharan Africa is overall the least competitive region, with 25 of the 34 economies assessed this year scoring below 50.
South Africa, the second most competitive in the region, improved to sixtieth position.
On a positive note, of the 25 countries that improved their health score by two points or more, 14 are from sub-Saharan Africa, making strides to close the gaps in healthy life expectancy.