RP SLIPS IN ECONOMIES GLOBAL COMPETITIVENESS
GENEVA, MAY 9, 2007 (STAR) The Philippines slipped from 42nd to 45th place in the rankings of the World Competitiveness Yearbook 2007 released by the IMD business school of Lausanne, Switzerland yesterday.
The ranking was based on a study of 55 economies listed according to 323 criteria that measure how the nations create and maintain conditions favorable to business.
The US economy maintained its position atop world competitiveness rankings, despite a record trade deficit, its high corporate tax rate on profits and low confidence in the government’s handling of public finances, according to an annual survey released Thursday.
Singapore was ranked just behind, with Hong Kong, Luxembourg and Denmark rounding out the top five most competitive national economies, said the Lausanne, Switzerland-based IMD business school.
Rounding out the top 10 were Switzerland, Iceland, Netherlands, Sweden and Canada. Germany made the biggest jump, up nine places to 16th, while South Africa fell furthest, down 12 spots to 50th.
Project director Stephane Garelli said the United States’ position was cemented by the dynamism of its financial market, which drives what is the world’s strongest domestic economy, topping all others in its amount of investments, stock purchases and commercial service exports.
But the 2007 results highlight how many of the world’s emerging economic powers were catching up with the United States because of government policies better tuned to economic performance. The US has topped the list every year since 1994.
Garelli said only 15 of the countries analyzed were losing ground to the United States. The Philippines is included in this group, along with Indonesia, Italy, Argentina, Brazil, Mexico, Turkey and France.
"London is becoming a very big competitor to New York in investment banking, while Singapore is challenging the US in wealth management," he said. "New companies and new brands are appearing all over the world."
China jumped three places to 15th in the report, which also highlighted strong improvements by India, Slovakia and Estonia.
Wealthy countries who have boosted their competitiveness in recent years include Austria, Australia, Denmark, Switzerland and Hong Kong. But Garelli said the US economy has been hurt by its record trade deficit, which combined with the budget deficit brings the national debt to US$8.7 trillion.
High dollar reserves in foreign countries, particularly in Asia, mean the US is relinquishing its grip on monetary policy. The US is also scoring poorly in other sectors such as investments in telecoms, youth interest in science, mobile telephone subscriptions and language skills among its work force, according to the report.
The shortcomings were some of the same as those cited in a similar competitiveness study last year by the World Economic Forum, which dropped the US in its table from the top position to sixth.
"It’s very good to be the leader, but the problem is that the US model has become copied by everyone else," Garelli said. "The US constantly needs to reinvent itself because everyone else steals its recipe."
However, the US also ranked as the easiest place to secure venture capital for business development and surpassed all other economies in key technology criteria such as computers in use and high-tech exports, according to the report. Venezuela was ranked last for the second year in a row, immediately proceeded by Indonesia, Croatia, Poland and Argentina. — AP
Chief News Editor: Sol Jose Vanzi
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