JAKARTA (TheInsiderStories) – International Institute for Management Development (IMD) places Singapore as the most competitive economy in the world for the first time since 2010, surpassed United States, who slipped from the top position. Then, economic uncertainty affected conditions in Europe, and the effect of rising fuel prices affected ratings in several countries the Middle East, IMD reported on Tuesday (05/28).
According to IMD Director of the World Competitiveness Center Arturo Bris, Singapore’ rise to the top is driven by its sophisticated technological infrastructure, availability of skilled labour, favourable immigration laws, and efficient ways to establish new businesses.
Meanwhile, Hong Kong SAR was in second place, helped by friendly taxes and a business policy environment and access to business finance. Bris assessed the initial push for confidence from the first wave of President Donald Trump’ tax policy seems to have faded in the United States.
While still setting global measures for infrastructure levels and economic performance, the competitiveness of the world’s largest economy was hit by higher fuel prices, weaker high-tech exports and fluctuations in the value of the dollar.
“In a year of high uncertainty in global markets due to rapid changes in the international political landscape as well as trade relations, the quality of institutions seem to be the unifying element for increasing prosperity. A strong institutional framework provides the stability for business to invest and innovate, ensuring a higher quality of life for citizens,” he said.
In Europe, Switzerland rose to fourth place from 5th, helped by economic growth, the stability of the Swiss Franc and high-quality infrastructure. Alpine Economy is ranked top for university and management education, health services, and quality of life.
Competitiveness across Europe has struggled to gain ground with most economies on the decline or standing still. The Nordics, traditionally a powerhouse region for competitiveness, have failed to make significant progress this year, while ongoing uncertainty over Brexit has seen the United Kingdom fall from 20th to 23rd.
According to the data, Ireland leads the way globally for investment incentives, the handling of public sector contracts and areas such as image, branding and talent management. Portugal posted the biggest fall in the region, down six places to 39th – a reversal from gains made in the previous year.
In addition, stronger trading income helped oil and gas producers like Saudi Arabia’s biggest climbers this year, which jumped 13 places to 26th place, and Qatar, which entered the top 10 for the first time since 2013.
The United Arab Emirates, which was ranked 15th in 2016, has now jumped sharply to the top five for the first time. The UAE is now ranked first globally for business efficiency, outperforming other economies in areas such as productivity, digital transformation and entrepreneurship.
While Israel (24th) declined mainly due to negative performance on various government efficiency indicators, such as its budget deficit.
In addition, the South American economy ranks lowest for three of the four main criteria groups – economic performance, government efficiency, and infrastructure. Venezuela remains anchored to the bottom, hit by inflation, poor credit access and a weak economy.
Similarly, Chile experienced the biggest decline this year, down 7 places to 42, while Brazil and Argentina were also ranked fifth in the bottom.
Brazil ranks lowest among 63 countries studied for credit costs, making it the most expensive country for businesses to borrow, and for language skills.
Turning to the Asia-Pacific region, emerging as a beacon for competitiveness, with 11 of 14 economies both increasing or maintaining their positions, led by Singapore and Hong Kong at the top of the global chart.
Furthermore, Indonesia jumped to 32nd places, thanks to increased efficiency in the government sector and increased infrastructure and business conditions. Thailand, driven by an increase in foreign direct investment and productivity, rose five places to 25th place in 2019.
However, Japan finally fell five places to 30th positions which were hampered by a sluggish economy, government debt and a weakened business environment. The South Asian country is characterized by the lowest labour costs in the 63 countries studied.
Outside Africa, South Africa has experienced a decline in quality for infrastructure – especially in the fields of health, education and energy – and eliminated improvements in the business landscape as South Africa slipped to 56th from 53rd.
The new ranking takes into account various “hard” statistics such as unemployment, GDP and government spending on health and education, and “soft” data from Executive Opinion Surveys that cover topics such as social cohesion, globalization and corruption.
Written by Daniel Deha, Email: email@example.com