2005 Press Releases
Ireland Climbs International Competitiveness Rankings
Ireland appears 26th in the latest rankings for the Growth
Competitiveness Index (GCI), indicating sound relative growth prospects
over the next 5-8 years, an improvement from 30th position last
year. While national macroeconomic conditions and the quality of
public institutions feeding into this measure place Ireland closer to
the top 13, a relatively weaker ranking of 31st in the technology
component of the index restricts Ireland's position. Ireland's
ranking on the complementary Business Competitiveness Index (BCI)
improved to 19th from 22nd in 2004, attributable to improved ratings
for the sophistication of company operations & strategy and in the
quality of the national business environment.
The rankings are drawn from a combination of hard data, publicly
available for each of the economies studied, and the results of the
Executive Opinion Survey, a comprehensive evaluation conducted by the
World Economic Forum, together with its network of partner institutes
(leading research institutes and business organizations) in the
countries covered by the Report. This year nearly 11,000 business
leaders were polled in a record 117 economies worldwide. The survey
questionnaire is designed to capture a broad range of factors affecting
an economy's business environment that are key determinants of
sustained economic growth. Particular attention is placed on elements
of the macroeconomic environment, the quality of public institutions
which underpin the development process, and the level of technological
readiness and innovation.
The World Economic Forum has been producing The Global Competitiveness
Report for 26 years, and its unique mix of hard and soft data has made
it possible to accurately capture the broad range of factors seen to be
essential to a better understanding of the determinants of growth. Each
year it has delivered a comprehensive overview of the main strengths
and weaknesses in a large number of countries, making it possible to
identify key areas for reform and policy formulation.
Highlights
* Finland is number one in the Growth Competitiveness Index (GCI)
rankings and holds this position for the fourth time in the last five
years. The country is very well managed at the macroeconomic level, but
it also scores very high in those measures that assess the quality of
its public institutions. Furthermore, the private sector shows a high
proclivity for adopting new technologies and nurturing a culture of
innovation. The United States, as last year, is ranked second: the
country demonstrates overall technological supremacy, with a very
powerful culture of innovation. However, technological prowess is
partly offset by a weaker performance in other areas measured by the
index. The US has a relatively low rank of 20 for the contracts and law
indicator, with particular concerns on the part of the business
community about the government's ability to maintain arm's-length
relationships with the private sector, and in the formulation of
policies more generally. But the country's greatest weakness concerns
the health of its macroeconomic environment, where it ranks a low 47th
overall. This echoes the increasingly vocal international concerns
about the macroeconomic imbalances in the US economy, especially as
regards the public finances.
* The Nordic countries continue to hold prominent positions in the
rankings among the top 10 most competitive economies this year, with
Finland (1), Sweden (3), Denmark (4), Iceland (7) and Norway (9) all in
privileged places. The stellar performance of these countries
demonstrates the great diversity within Europe, with some countries
doing very well by any measure, while others struggle behind. The
Nordics are also challenging the conventional wisdom that high taxes
and large safety nets undermine competitiveness, suggesting that what
is important is how well government revenues are spent, rather than the
overall tax burden per se.
* Elsewhere in Europe the most notable developments are the improvement
in the relative position of Ireland, which has moved up 4 places to 26
in the overall rankings; the improvement of Poland, which has moved up
9 places to 51st place in the rankings; the continuing excellent
performance of Estonia, ranked 20th for the second year in a row, and
which is by a significant margin the most competitive economy among the
10 countries that joined the EU last year; and the significant decline
of Greece (ranked 46, compared to 37 last year), which now has joined
Italy (ranked 47) as the two lowest-ranking countries among the EU-25,
bar Poland. Greece's worsening performance is linked to a significant
weakening in the quality of its overall macroeconomic environment,
driven by a ballooning budget deficit and increasing pessimism on the
part of the business community about the short-term economic outlook.
* Leading within Asia are Taiwan and Singapore, ranked 5th and 6th
respectively, some places ahead of the next Asian country covered by
the GCI, Japan, ranked 12th. The distance between these top-ranked
economies and Japan has increased since last year, reflecting Japan's
relatively poor macroeconomic performance, particularly as regards
management of the public finances. In this respect, reforms of the
postal system are likely to be of particular relevance. Taiwan and
Singapore are economies that, through sustained good policies over the
past few decades, have lifted their citizens from poverty, joining the
ranks of the most prosperous and competitive economies in the world.
* Compared with the other tigers, Hong Kong is ranked much lower at
28th place, having dropped 7 places since last year. This is
attributable to a tangible deterioration in the quality of the
institutional environment. Hong Kong saw a weakening in perceived
judicial independence, the protection of property rights, and in
government favouritism in policy-making. Hong Kong's ranks on irregular
payments (corruption) have also fallen well below its previously
excellent performance.
* Australia, in 10th place, has moved up 4 places since last year, with
improvements across many of the institutional and technology indicators
measured by the index. The country has world-class public institutions,
sound public finances and very low levels of corruption in the economy.
And Australia's companies are measured as being very innovative, while
harnessing new information and communications technologies extremely
well.
* China and India, 49th and 50th, respectively, now rank much more
closely to one another than in previous years. While China dropped 3
ranks, India moved up 5 places. China had a slightly deteriorating
score with regard to the country's macroeconomic environment, while
India's improved position is due to a somewhat higher rank in the area
of technology. Both China and India have had an excellent growth
performance in recent years. However, both countries continue to suffer
from institutional weaknesses which, unless addressed, are likely to
slow down their ascension to the top tier of the most competitive
economies in the world.
* As in previous years, Chile, ranked 23rd, leads the way in Latin
America by a wide margin. The gap with respect to the next best
performer in the region has widened from 26 places in 2004 to 31 places
in 2005, a characteristic not seen in any other region of the world.
Chile continues to benefit from a combination of remarkably competent
macroeconomic management and public institutions, which have achieved
EU levels of transparency and efficiency: only 8 of the 25 EU members
have stronger performances in the area of public institutions.
* Mexico has fallen 7 places since last year to 55th, ceding its second
spot in the regional ranking to Uruguay, while Brazil fell 8 places to
65th position. Both Mexico and Brazil suffered major plunges in those
indicators that capture the quality of their public institutions,
including factors such as judicial independence and favouritism of
government officials in policy-making and procurement decisions. In the
meantime, Venezuela, which had a ranking of 62 in 2001, continues its
precipitous decline to the bottom of the rankings, falling another 4
places to 89th position overall this year. Widespread mismanagement has
led to strong deterioration in all areas measured by the index: the
macroeconomic environment has become highly unstable, the quality of
public institutions has been eroded and there has also been a measured
decline across a broad range of technology indicators.
* Within the Middle East and North Africa (MENA) region, the small Gulf
States perform quite well in the overall GCI rankings. The United Arab
Emirates (UAE) and Qatar are ranked 18th and 19th, respectively.
Terms-of-trade gains have boosted growth rates and reinforced already
high levels of confidence in the business community, resulting from
ongoing institutional modernization and improvements in macroeconomic
management.
* While most of the countries of the sub-Saharan African region are
less competitive, the region does have a number of relative success
stories. This includes South Africa (42nd), Botswana (48th), Mauritius
(52nd) and Ghana (59th), the latter's competitiveness performance being
even more notable, having improved by 9 places since 2004. Tanzania has
also seen a significant improvement over the past year, moving up 11
places in the overall rankings. On the other hand, Namibia, a
relatively good performer overall, lost 11 places over the past year,
as, predictably, did Madagascar and Zimbabwe, losing 11 and 10 places,
respectively. Zimbabwe is a particularly sad case, whose quick descent
to the bottom of the world's competitiveness rankings reflects the
continued deterioration of the institutional climate, including the
disappearance of property rights, the corruption of the rule of law,
and the implications these and other factors have had for macroeconomic
management. The country has the world's worst ranking (117) for the
quality of its macroeconomic environment.
"Policy-makers are presently struggling with ways of intelligently
managing global risks, while preparing their economies to perform well
in an economic landscape characterized by growing complexity. The World
Economic Forum has for many years played a facilitating role in this
endeavour by providing detailed assessments of 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
provided with a tool to assist them in the formulation of improved
economic policies and institutional reforms," noted Klaus Schwab,
Founder and Executive Chairman of the World Economic Forum.
The World Economic Forum continues to expand geographic coverage of The
Global Competitiveness Report, currently featuring a total of 117
economies, of which the new entrants this year include Albania,
Armenia, Azerbaijan, Benin, Cambodia, Cameroon, East Timor, Guyana,
Kazakhstan, Kuwait, Kyrgyz Republic, Moldova, Mongolia, Qatar and
Tajikistan, making this Report the most comprehensive of its type.
Harvard Business School Professor Michael E. Porter presents the
results of the Business Competitiveness Index (BCI), an especially
useful complement to the GCI, with its emphasis on a range of
company-specific factors conducive to improved efficiency and
productivity at the micro level, such as the sophistication of the
operating practices and strategies of companies, and the quality of the
microeconomic business environment in which a nation's companies
compete. Results of the BCI rankings are fully reported in the
Executive Summary and available online at www.weforum.org/gcr
This year's Report contains a number of studies that address different
aspects of competitiveness and, more generally, themes which emanate
from the World Economic Forum's deep concern with growth and
development. Of particular note are Columbia University's Jagdish
Bhagwati's essay on the importance of globalization and openness for
economic prosperity; the Institute for International Economics' John
Williamson's piece on the existence of a "new" development consensus;
Harvard University's Kenneth Rogoff's paper discussing how in today's
world exchange rate competitiveness has become an increasingly subtle
and difficult-to-measure phenomenon; and the London School of
Economics' Richard Layard's chapter about how to deal with the
unemployment problem in Europe; among others.
The Report contains a detailed country profile for each of the 117
economies featured in the study, providing a comprehensive summary of
the overall position in the Index rankings as well as a guide to what
are considered to be the most prominent competitive advantages and
competitive disadvantages of each. Also included is an extensive
section of data tables with global rankings on over 100 indicators.
Notes to Editors:
Click here to download the full rankings: www.weforum.org/pdf/Gcr/rankings
Should you require country profiles or specific information, please contact gcp@weforum.org
The Report, published by Palgrave Macmillan, can be ordered online at
www.palgrave.com/worldeconomicforum, by telephone at +44 (0)1256
302688, by fax at +44 (0)1256 330688 or by e-mail at orders@palgrave.com
For more information you can watch video interviews with the authors of the Report on our website at www.weforum.org/gcr
For contact details of any of our 122 partner institutes, go to www.weforum.org/PartnerInstitutes
Feel free to download print-quality high resolution photographs of the
cover and the authors of the Report at www.pbase.com/forumweb/gcr
Webeditors, do not forget to cross-link to our special page on The
Global Competitiveness Report 2005-2006 at www.weforum.org/gcr
For more information, please contact:
Communications and Public Affairs
World Economic Forum
Tel.: +41 (0)22 869 1212
Fax: +41 (0 22 869 1394
E-mail: public.affairs@weforum.org
FedEx Corporation, Gallup International and USAID are Partners of The Global Competitiveness Report 2005-2006.
__________________________________________
The World Economic Forum is an independent international organization
committed to improving the state of the world by engaging leaders in
partnerships to shape global, regional and industry agendas.
Incorporated as a foundation in 1971, and based in Geneva, Switzerland,
the World Economic Forum is impartial and not-for-profit; it is tied to
no political, partisan or national interests. (www.weforum.org)
IRELAND
Contact: Dr. Eleanor Doyle
Competitiveness Survey Group1, Dept. of Economics, UCC
Tel.: 087 8057696
E-mail: e.doyle@ucc.ie
1 The Competitiveness Survey Group collaborates on the Executive
Opinion Survey published in the annual Global Competitiveness
Report. Members: Dr. Eleanor Doyle, Niall O'Sullivan, Rosemary
Kelleher, Dr. Bernadette Power.
119MMcS
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