Thailand edges up world competitiveness rankings
THAILAND has succeeded in moving up in the global competitiveness rankings, from 39th in 2011 to 38th in 2012 and 37th this year, but it has to overcome several challenges to catch up with the pace of improvement seen by its regional peers.
In the World Economic Forum's Global Competitiveness Report 2013-2014, among 148 economies Thailand ranks as 38th most competitive. However, the overall competitiveness ranking went up by only one notch, compared to 12 places by Indonesia (now ranked 38th), 6 places by the Philippines (59), 5 places by Vietnam (70th), and one place by Malaysia (24th). Witnessing no improvement in its ranking, Singapore (2nd) has been enjoying the high place for a number of years.
This year marks the first time that Laos (81st) and Myanmar (139th) appear on the list, being the latest two of all 10 Asean member countries.
In the mixed competitiveness landscape, Indonesia and the Philippines are dubbed as "some of the most dynamic and rapidly improving economies in terms of competitiveness". Asia is home to some of the most competitive nations, including three members in the top 10 (Singapore, Hong Kong, and Japan). On the other hand, a number of Asian countries, including Pakistan and Timor-Leste, have been unable to improve their competitiveness.
Last year, among 144 economies, Thailand was ranked 38th, against 39th among 142 countries in the previous year. Ranked 37th this year, Thailand has shown a very small improvement in its performance and faces considerable challenges.
Political and policy instability, excessive red tape, omnipresent corruption and clientelism, security concerns, low reliability and high uncertainty about property rights protection seriously undermine the quality of Thai public institutions (85th). Poor public health (74th) and education, two other critical building blocks of competitiveness, require urgent attention.
After three years of gradual decline, Indonesia has bounced back with the strongest improvements in the region. The country has progressed in 10 of the 12 pillars of the ranking criteria, with the biggest improvement in the infrastructure pillar, where it leapfrogged 17 places to 61st. After years of neglect, Indonesia has been boosting infrastructure, spending to upgrade roads, ports, water facilities, and power plants.
The Philippines sees positive improvement across most dimensions. In the institutions pillar (79th), the Philippines has leapfrogged over the past years thanks to the current government's fight against corruption. Corruption had historically been one of the country's biggest drags on competitiveness.
Vietnam regained half of the ground it lost last year, thanks to a slightly better macroeconomic environment as inflation was back to single-digit levels in 2012, besides improvements in the quality of transport and energy infrastructure, albeit from a very low base.
Second among Asean countries, behind Singapore, Malaysia ranks no lower than 51st in any of the 12 pillars of the report and features in the top 10 of two of them. Its most notable advantages are its efficient and competitive market for goods and services, its well-developed and sound financial market, and its business-friendly institutional framework (29th). In a region plagued by corruption and red tape, Malaysia stands out as one of the very few countries that has been relatively successful at tackling these two issues, as part of its economic and government transformation programmes, according to the report.
Witnessing improvements in all dimensions, Singapore can see better prosperity thanks to the sophistication and innovation in the private sector.
Globally, Switzerland continues to maintain the No 1 position for five consecutive years, while Finland comes in third. Excellent innovation and strong institutional environments are increasingly influencing economies' competitiveness. Germany moves up two places (4th) and the United States reverses a four-year downward trend, climbing two places to fifth. Hong Kong (7th) and Japan (9th) also close the gap on the most competitive economies, while Sweden (6th), the Netherlands (8th) and the United Kingdom (10th) fall.
The United States continues to be a world leader in bringing innovative products and services to market. Its rise in the ranking is down to a perceived improvement in the country's financial market as well as greater confidence in its public institutions. However, serious concerns persist over its macroeconomic stability, which ranks 117 out of 148 economies.