Pakistan shows slight improvement on the Innovation Pillar of the Global Competitiveness Index 2009-2010 of the World Economic Forum; improves 3 ranks from last year

Switzerland tops the overall ranking in The Global Competitiveness Report 2009-2010, released by the World Economic Forum. The United States falls one place to second position, with weakening in its financial markets and macroeconomic stability. Singapore, Sweden and Denmark round out the top five. European economies continue to prevail in the top 10 with Finland, Germany and the Netherlands following suit. The United Kingdom, while remaining very competitive, has continued its fall from last year, moving down one more place this year to 13th, mainly attributable to continuing weakening of its financial markets.

The People’s Republic of China continues to lead the way among large developing economies, improving by one place this year, solidifying its position among the top 30. Among the three other large BRIC economies, Brazil and India also improve, while Russia falls by 12 places. Several Asian economies perform strongly with Japan, Hong Kong SAR, Republic of Korea and Taiwan, China also in the top 20. In Latin America, Chile is the highest ranked country, followed by Costa Rica and Brazil.

Like last year, Pakistan ranks 101st. Still at an early stage of development, the country fails to improve significantly on any of the basic determinants of its competitiveness, namely institutions (104th), infrastructure (89th). It shows slight improvements in the macroeconomic stability (114th), Health and primary education (113th), and higher education (118th). Pakistan also showed improvements in Innovation and Sophistication Factors from 85 last year to 84 this year.

On business sophistication it improved 6 ranks and stands at 81. The Innovation index has improved from 82 in 2008-2009 to 79 in the 2009-2010. However, to make things worse, the threat of terrorism bears heavily on the business community.

The Global Competitiveness Report has, over the last three decades, become one of the world’s most respected assessments of national competitiveness, providing a mirror image of a nation’s economic environment and its ability to achieve sustained levels of prosperity and growth. In view of presenting an image that is as close to reality as possible, the World Economic Forum draws its data from two sources: international hard data sources and the Executive Opinion Survey (Survey).The Survey is a unique tool for capturing timely and vital information that is not available on a global level. It captures the perception of business executives about the environment in which they operate, thus imparting a unique source of insight about the competitiveness of their economy.

The World Economic Forum has conducted the annual Survey for 30 years. The Survey has evolved over time to capture new data points essential to the Global Competitiveness Index and several other projects. The Survey has also expanded in its scope of completion, achieving this year a record sample of over 13,000 surveys from 133 countries between January and May 2009.

Following the editing process a total of 12,614 surveys were retained globally. This represents an average of 95 respondents per country. Table 1 shows key attributes of the Survey respondents for the 2009 dataset. The Survey is divided into 13 sections related to the 12 pillars of the Global Competitiveness Index, and includes a general “About your company” section capturing information about the respondent’s company as well. The data gathered thus provide a unique source of insight and a qualitative portrait of each nation’s economic and business environment, and how it compares with the situation in other countries. Given the scope of the Survey’s coverage and in order to maximize its outreach, it is translated into more than 20 languages.

This year Pakistan submitted almost 300 Executive Opinion Surveys, out of 300 only 1% were submitted online. 41% of the companies had less then 100 employees, while 28% represented the SMEs with 101 to 500 employees in the company. The Survey had 9%, 14% and 6% representations of organizations with employees between 501 to 1000, 1001 to 5000 and 5001 to 20000 respectively. Only 2% of the respondents represented the large scale entities with more than 20000 employees.

The most problematic factors for doing business in Pakistan according to the Global Competitiveness Report 2009-2010

PAKISTAN’s BALANCE SHEET ON THE GLOBAL COMPETITIVENESS INDEX 2209-2010

Pakistan showed advantages in a few sub-indices amongst the 134 economies, namely: available seat kilometer 48, HIV prevalence 15, total tax rate 22, hiring and firing practices 38, financing through local equity market 45, strength of investor protection 24, domestic market size index 24 and state of cluster development 50

A number of countries in the Middle East and North Africa region are in the upper half of the rankings, led by Qatar, United Arab Emirates, Israel, Saudi Arabia, Bahrain, Kuwait and Tunisia, with particular improvements noted in the Gulf States, which continue their upward trend of recent years. In sub-Saharan Africa, South Africa, Mauritius and Botswana feature in the top half of the rankings, with a number of other countries from the region measurably improving their competitiveness.

Click here to read the highlights of the Report.

“The strong interdependence among the world’s economies makes this a truly global economic crisis in every sense. Policy-makers are presently struggling with ways of managing these new economic challenges, while preparing their economies to perform well in a future economic landscape characterized by growing uncertainty. In a difficult global economic environment, it is more important than ever for countries to put into place strong fundamentals underpinning economic growth and development,” said Klaus Schwab, Founder and Executive Chairman of the World Economic Forum.

Xavier Sala-i-Martin, Professor of Economics, Columbia University, USA, and co-author of the Report added, “Amid the present crisis, it is critical that policy-makers not lose sight of long-term competitiveness fundamentals amid short-term urgencies. Competitive economies are those that have in place factors driving the productivity enhancements on which their present and future prosperity is built. A competitiveness-supporting economic environment can help national economies to weather business cycle downturns and ensure that the mechanisms enabling solid economic performance going into the future are in place.”
The rankings are calculated from both publicly available data and the Executive Opinion Survey, a comprehensive annual survey conducted by the World Economic Forum together with its network of Partner Institutes (leading research institutes and business organizations) in the countries covered by the Report. This year, over 13,000 business leaders were polled in 133 economies.

The survey is designed to capture a broad range of factors affecting an economy’s business climate. The Report also includes comprehensive listings of the main strengths and weaknesses of countries, making it possible to identify key priorities for policy reform.

The Global Competitiveness Report’s competitiveness ranking is based on the Global Competitiveness Index (GCI), developed for the World Economic Forum by Sala-i-Martin and introduced in 2004. The GCI is based on 12 pillars of competitiveness, providing a comprehensive picture of the competitiveness landscape in countries around the world at all stages of development. The pillars include Institutions, Infrastructure, Macroeconomic Stability, Health and Primary Education, Higher Education and Training, Goods Market Efficiency, Labour Market Efficiency, Financial Market Sophistication, Technological Readiness, Market Size, Business Sophistication, and Innovation.

The Report contains a detailed profile for each of the 133 economies featured in the study, providing a comprehensive summary of the overall position in the rankings as well as the most prominent competitive advantages and disadvantages of each country/economy based on the analysis used in computing the rankings. Also included is an extensive section of data tables with global rankings for over 110 indicators.

This year’s Report also includes a number of discussions of selected countries and regions including the United States, the large emerging BRIC economies and the 12 recent accession members of the European Union, providing an in-depth analysis of the issues affecting national competitiveness.

	Xavier Sala-i-Martin, Professor of Economics, Columbia University, USA Watch the interview
	Jennifer Blanke, Senior Economist, Head of Global Competitiveness Network, World Economic Forum Watch the interview
	Thierry Geiger, Economist, Global Leadership Fellow, World Economic Forum Watch the interview (Français)
	Margareta Drzeniek Hanouz, Senior Economist, Global Competitiveness Network, World Economic Forum Watch the interview (Deutsch)
	Irene Mia, Director, Senior Economist, Global Competitiveness Network, World Economic Forum Watch the interview (Espanol)