SINGAPORE IS A NATION THAT IS CONSTANTLY INNOVATING AND THAT HAS SHOWN UP IN THE LATEST WORLD ECONOMIC FORUM COMPETITIVENESS REPORT
The World Economic Forum has delivered a mixed scorecard in its 2019 Global Competitiveness Report, questioning the effectiveness of the trillions of dollars pumped into the global economy by central banks
10 October 2019 | Staff Writers (Image: Lily Banse)
According to the World Economic Forum (WEF), in the ten years since the onset of the global financial crisis, central banks have injected more than US$10 trillion into world economies. In releasing its latest Global Competitiveness Report, the WEF cautioned, “While these unprecedented measures were successful in averting a deeper recession, they are not enough on their own to catalyse the allocation of resources towards productivity-enhancing investments in the private and public sectors.”
The report named Singapore as the world’s most competitive economy, while the United States remains the most competitive large economy in the world, coming in at second place. Hong Kong SAR (3rd), Netherlands (4th) and Switzerland (5th) round up the top five.
China is far and away the best competitive performer among the five BRICS economies, China ranks 28th among the world economies, 15 places ahead of Russia, 32 ahead of South Africa and 40 places above India and 43 in front of Brazil.
Commenting on the report’s release, Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, said, “The Global Competitiveness Index 4.0 provides a compass for thriving in the new economy where innovation becomes the key factor of competitiveness.
“The report shows that those countries which integrate into their economic policies an emphasis on infrastructure, skills, research and development, and support those left behind are more successful compared to those which focus only on traditional factors of growth.”
Launched in 1979, the report provides an annual assessment of the drivers of productivity and long-term economic growth. The assessment is based on the Global Competitiveness Index (GCI), which maps the competitiveness landscape of 141 across 12 pillars, which are: Institutions, Infrastructure; ICT adoption; Macroeconomic stability; Health; Skills; Product market; Labour market; Financial system; Market size; Business dynamism; and Innovation capability. For each indicator, the index uses a scale from 0 to 100 and the final score shows how close an economy is to the ideal state or “frontier” of competitiveness.
Asia Pacific nations among the top 30 economies named in the report were Singapore (1), Hong Kong SAR (3), Japan (6), Taiwan (12), South Korea (13), Australia (16), New Zealand (19), Malaysia (27) and China (28).
With interest rates at, or near, all-time lows across many economies, the WEF warned that monetary policies are running out of steam. Says Saadia Zahidi, Head of the Centre for the New Economy and Society at the World Economic Forum. “What is of greatest concern today is the reduced ability of governments and central banks to use monetary policy to stimulate economic growth. This makes it all the more important that competitiveness-enhancing polices are adopted that are able to boost productivity, encourage social mobility and reduce income inequality,”
Only four of the G20 economies made the Top Ten list, United States (2nd), Japan (6th), Germany (7th) and the United Kingdom (9th). As for the Asia-Pacific, the report said, “The presence of many competitive countries in East Asia and the Pacific makes this region the most competitive in the world, followed closely by Europe and North America.”
Although the region is home to some of the most technologically advanced economies in the world, the average scores of the innovative capability) and business dynamism were relatively low, lagging behind Europe and North America.