India has moved up two notches and is placed 43rd among the world’s most competitive economies in this year’s World Economic Forum rankings.
NEW DELHI: India has moved up two notches and is placed 43rd among the world’s most competitive economies in this year’s World Economic Forum rankings topped by Switzerland that replaced the 2005 topper, the US, which has slipped to sixthplace. Finland, Sweden, Denmark and Singapore all overtook the U.S. with Japan, Germany, the Netherlands and the U.K. rounding out the top 10.
While the US remained the best country to do business in, it ranked 69th for its economic environment with the government set to post a fifth consecutive annual budget deficit and after its current account deficit widened more than forecast last quarter to the second-largest on record.
China, the other large fast developing economy, has suffered a fall in its ranking to 54 from 48.
India’s overall rank of 43 in the Geneva-based WEF’s global competitiveness index for 2006 “demonstrates remarkably high scores in capacity for innovation and sophistication of firm operations”, the forum’s chief economist Augusto Lopez-Claros said in a report released on Tuesday.
India scored 4.44 overall in the index in which the top ranking Switzerland got 5.81 in the study covering 125 nations. China’s overall score was 4.24.
India got credit in particular for the quality of scientific research and the number of scientists and engineers , which are increasingly supplying highly-skilled professionals to the private sector.
“Firm use of technology and rates of technology transfer are high, although penetration rates of the latest technologies are still quite low by international standards, reflecting India’s still low levels of per capita income and high incidence of poverty,” Lopez-Claros said.
Weaknesses in the coverage of educational opportunities and poor-quality infrastructure which limit the more equitable distribution of the benefits of India’s high growth rates were among the factors which pulled down the economy in the competitiveness index.
China ranks very high, at the sixth place globally, in terms of being consistent due to the cautious macro-economic management by its authorities. This reflects in China’s low inflation, one of the highest savings rates in the world, and manageable levels of public debt.
Like India, China has a low penetration rates for the latest technologies. As the penetration rates are expanding more quickly in other countries, China’s ranking is falling.
Secondary and tertiary school enrolment rates are better in China than they are in India, says the report, but still low by international standards.
The Asian continent is home to some of the most as well as least competitive economies. Singapore leads the pack, ranked fifth overall, followed by Japan in the seventh place, with Hong Kong in the 11 th and Taiwan in the 13th place.
These economies all have high-quality infrastructure, flexible and efficient markets, and healthy, well-educated workforces. They also operate on the outer boundaries of the technology frontier.
China also needs to make progress in improving various institutions, including reducing the burden of the government regulation, improving the climate for the protection of property rights as well as safeguarding the independence of the judiciary.
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