INCAE analyzes Regional results of the Global Competitiveness Report 2010-2011
- Switzerland is the most competitive country in the world.
- Chile leads the countries of Latin America and Panama is the most competitive economy in Central America.
- Corruption, bureaucracy and criminality are the main problems in the region.
- The CLACDS of INCAE Business School is the regional partner of the World Economic Forum
Alajuela, Costa Rica. September 9, 2010. - Switzerland tops the positions of the Global Competitiveness Report 2010-2011, released today by the World Economic Forum from Tianjin, China. The United States is in fourth place, surpassed by Sweden (2) and Singapore (3). In addition to macroeconomic imbalances, concerns about the state of financial markets persist and some indicators related to the confidence and efficiency of the United States government are weakening. The Nordic countries continue to perform well in the rankings, with Sweden, Finland (7) and Denmark (9) in the top 10 places, and with Norway in position 14. Germany (5) advanced two places and leads the positions of the Euro zone. Further behind are the Netherlands (8) and the United Kingdom (12).
Published with the support of the Latin American Center for Competitiveness and Sustainable Development (CLACDS) of INCAE - regional partner of the World Economic Forum- and under the co-authorship of Prof. Xavier Sala-i-Martin from Columbia University, the Global Report on Competitiveness analyzes the policies and factors that determine the productivity of economies and therefore define the potential for growth and prosperity of countries. The 2010-2011 report covers 139 economies and the ratings are built based on national statistics and international organizations and the Executive Opinion Survey of the World Economic Forum that is carried out on more than 13,500 entrepreneurs around the world.
The People's Republic of China (27) leads the group of large developing countries (BRIC), advancing two places and consolidating its position within the first 30. India (51), Brazil (57) and Russia (63) maintained a stable performance compared to the previous report. Several Asian economies performed well, including Japan (6) and Hong Kong (11).
In general terms, Latin America showed a stable behavior in the face of the crisis, as a result of the application for several years of a prudent fiscal policy, trade liberalization, the proper functioning of the markets and the diversification of exports. However, only Chile (30) manages to be among the top 50 most competitive economies in the world, so it is evident that the region needs to emulate the best international practices in order to show its full competitive potential. Bureaucracy, corruption, transparency of institutions and the scourge of crime and violence are the main problems in Latin America. Chile continues to lead the ranking positions, followed by Panama (53), Costa Rica (56) and Brazil. Chile benefits from its liberalization and opening-up efforts, complemented by an excellent fiscal record and the proper functioning of its institutions that have not only allowed it to grow steadily but also allowed it to have the necessary resources to face the challenges of the reconstruction for the 2009 earthquake.
Arturo Condo, Rector of INCAE Business School highlighted that "thanks to its association with the World Economic Forum, INCAE can monitor the factors that determine the productivity of the region's economies and collaborate with governments and the private sector in defining a concerted agenda of actions to improve the prospects for economic growth in Latin America In this sense, INCAE and the World Economic Forum will organize an event for dialogue and reflection on October 18, 2010, to launch a concerted agenda of competitiveness for Central America from Private Sector Proposals "
Panama advanced 6 places in the report, showing one of the best performances in the region, as a result of its constant improvements in infrastructure - a pillar where it advanced a total of 21 places - a better macroeconomic balance and its ability to attract foreign investment and adapt technology. However, Panama faces the challenge of growing inclusively, reducing the gaps between urban and rural, and improving the quality of its educational system. Costa Rica remains stable in position 56 in the ranking, after having risen 13 positions from 2006 to 2009. The country's strengths are concentrated in the quality of its educational system, the transparency of its institutions, and the sophistication and innovation of companies. . Cota Rica faces significant challenges in infrastructure and in stopping the escalation of crime and violence.
For its part, Guatemala (77), improved its position in 3 places, highlighting its macroeconomic performance even in times of crisis and the sustained advances in infrastructure. However, it has problems related to the transparency of institutions, the quality of the educational system and the cost of crime and violence. El Salvador falls 3 places (80) and continues its downward trend in the IGC. Despite its efforts to increase participation in international markets by opening up and attracting investment, El Salvador suffers from the ravages of crime and violence, and problems related to the quality of the educational system and innovation. Honduras (90) does not show improvement in its competitive position and cannot recover the drop observed in previous reports. Political instability, the performance of its institutions, the macroeconomic environment, the quality of education and crime threaten Honduran competitiveness, despite the desire to improve the ability to attract foreign investment and diversify the offer.
Ecuador (105) shows a deterioration in its institutional framework, especially in relation to the efficiency of the government and the judiciary. Likewise, the abandonment of efforts to integrate into the international economy is observed, highlighting the prevalence of barriers to trade and the difficulties faced by foreign direct investment. On the other hand, the nature of competitive advantage continues to depend on basic factors and the framework for innovation is poorly conducive. Despite important advances in their positions compared to the previous year, Bolivia (108, advance of 12 positions), Nicaragua (112, advance of 7 positions) and Paraguay (120, advance of 9 positions), continue in the last positions of the ranking, behind most of the world's economies in competitiveness. Its main weaknesses are in the quality of its institutions, crime and violence, bureaucracy, the quality of its educational system and the poor functioning of its markets.
Lawrence Pratt, Director of CLACDS highlighted that "The results of the Global Competitiveness Report make it possible to define an agenda of actions to improve the competitive performance of our countries. It is clear that crime and violence constitute the main challenge in the region, which is why concerted action by governments and the private sector is needed to confront it. Obviously, there is also much to be done to make institutions more transparent, defend democracy, improve the quality of education, improve regional integration and promote more inclusive development.".