The World Economic Forum’s (WEF’s) latest findings in its Global Competitiveness Report for 2018/19 again raised several flags about factors in South Africa’s economic performance, which are having a serious negative impact on its international competitiveness, says North West University economist Professor Raymond Parsons.
Featuring the new Global Competitiveness Index 4.0, the WEF’s report assesses the competitiveness landscape of 140 economies, providing insight into the drivers of economic growth in the era of the Fourth Industrial Revolution.
In light of political and economic developments in South Africa in recent years, Parsons notes that the further slippage in the country’s overall global competitiveness ranking in the latest restructured and refined WEF report for 2018/19 from 62 to 67, out of 140 countries, is not unexpected.
Mauritius, meanwhile, retains its top spot among sub-Saharan African countries, followed by South Africa.
According to the latest WEF assessment, the South African economy has continued to struggle with issues like cooperation in labour-employer relations, which ranks at 136; time to start a business, which ranks at 128; and security and health, ranking at 132 and 125, respectively.
The country’s property rights ranking has dropped from 56 to 97.
However, on a more positive note, the WEF identified that among South Africa’s strengths are its large market size, good infrastructure and a well-developed financial system as positive pillars of competitiveness.
South Africa’s ten-year average annual gross domestic product growth has only been 1.7%, the WEF’s survey highlighted.
It is already widely accepted that, for South Africa to break out of this “low growth trap”, the country will need to better meet its socioeconomic challenges, Parsons said.
South Africa, he suggested, therefore needs to test its current policy initiatives and economic direction against the findings of the WEF survey and see how best to strengthen its global competitiveness.
The WEF assessment, meanwhile, also serves as another useful background input to the agenda of government’s Investment Summit next week, Parsons noted, adding that it resonates with the expectations around the Medium-Term Budget Policy Statement, or “mini-budget”, on October 24, as well as what message it will convey about recovery and reform in the South African economy.
According to the WEF report, the top ten economies in the world are led by the US, which is the closest economy to the frontier with a competitiveness score of 85.6, followed by Singapore, with a ranking of 83.5, and Germany, with a ranking of 82.8.
Switzerland, with a ranking of 82.6, comes in fourth, followed by Japan, with a ranking of 82.5, Netherlands, with a ranking of 82.4, and Hong Kong, with a ranking of 82.3.
The UK, with a ranking of 82, Sweden, with a ranking of 81.7, and Denmark, with a ranking of 80.6, round out the top ten.