After having fallen for six years in a row, Thailand halts the negative trend and improves by one place in this year's Global Competitiveness Index 2012-2013.
From 144 economies, Thailand is ranked the 38th, up one place from the previous year.
"Yet the competitiveness challenges the country is facing remain considerable. Political and policy instability, excessive red tape, pervasive corruption, security concerns, and uncertainty around property rights protection seriously undermine the quality of the institutional framework on which businesses rely heavily," said the report, released today by World Economic Forum in Geneva, Switzerland.
In the country highlights, the report showed that Thailand loses an additional 10 places in this category to rank a low 77th. Poor public health (71st) and basic education standards (89th), two other critical building blocks of competitiveness, require urgent attention. Turning to more sophisticated areas, which are just as important given Thailand’s stage of development, technological adoption is generally poor (84th).
Less than a quarter of the population accesses the Internet on a regular basis, and only a small fraction has access to broadband. On a more positive note, the macroeconomic environment continues to improve—albeit marginally (27th, up one spot)—as the budget deficit was reduced to less than 2 percent of GDP and the debt-to-GDP ratio dropped to 42 percent in 2011.
Globally, Switzerland, for the fourth consecutive year, tops the overall rankings. Singapore remains in second position and Finland in third position, overtaking Sweden (4th).
These and other Northern and Western European countries dominate the top 10 with the Netherlands (5th), Germany (6th) and United Kingdom (8th). The United States (7th), Hong Kong (9th) and Japan (10th) complete the ranking of the top 10 most competitive economies.
The large emerging market economies (BRICS) display different performances. Despite a slight decline in the rankings of three places, the People’s Republic of China (29th) continues to lead the group. Of the others, only Brazil (48th) moves up this year, with South Africa (52nd), India (59th) and Russia (67th) experiencing small declines in rankings.
Despite growing its overall competitiveness score, the United States continues its decline for the fourth year in a row, falling two more places to seventh position. In addition to the burgeoning macroeconomic vulnerabilities, some aspects of the country’s institutional environment continue to raise concern among business leaders, particularly the low public trust in politicians and a perceived lack of government efficiency. On a more positive note, the country still remains a global innovation powerhouse and its markets work efficiently.
The report indicates that Switzerland and countries in Northern Europe have been consolidating their strong competitiveness positions since the financial and economic downturn in 2008. On the other hand, countries in Southern Europe, i.e. Portugal (49th), Spain (36th), Italy (42nd) and particularly Greece (96th) continue to suffer from competitiveness weaknesses in terms of macroeconomic imbalances, poor access to financing, rigid labour markets and an innovation deficit.
Behind Singapore, several Asian economies are performing strongly, with Hong Kong SAR (9th), Japan (10th), Taiwan, China (13th) and the Republic of Korea (19th) all in the top 20.
In the Middle East and North Africa, Qatar (11th) leads the region while Saudi Arabia remains among the top 20 (18th). The United Arab Emirates (24th) improves its performance while Kuwait (37th) slightly declines. Morocco (70th) and Jordan (63rd) improve slightly. In sub-Saharan Africa, South Africa (52nd) and Mauritius (54th) feature in the top half of the rankings. However, most countries in the region continue to require efforts across the board to improve their competitiveness.
In Latin America, Chile (33rd) retains the lead and a number of countries see their competitiveness improve, such as Panama (40th), Brazil (48th), Mexico (53rd) and Peru (61st). Read more highlights of the report.
“Persisting divides in competitiveness across regions and within regions, particularly in Europe, are at the origin of the turbulence we are experiencing today, and this is jeopardizing our future prosperity.” said Klaus Schwab, Founder and Executive Chairman, World Economic Forum. “We urge governments to act decisively by adopting long-term measures to enhance competitiveness and return the world to a sustainable growth path.”
Xavier Sala-i-Martin, Professor of Economics, Columbia University, USA, said: “The Global Competitiveness Index provides a window on the long-term trends that are shaping the competitiveness of the world’s economies. In this light, we believe it offers useful insight into the key areas where countries must act if they are to optimize the productivity that will determine their economic future.”