ISLAMABAD: Pakistan has improved five ranks on the Global Competitiveness Index (GCI) securing the rank of 118 out of 142 economies.
“Up five places, Pakistan partially bounces back from last year’s significant drop in rank,” according to the Global Competitiveness Report 2011-12 published by the World Economic Forum on Wednesday and released in Pakistan in association with the Competitiveness Support Fund (CSF).
However, in several categories, the country remains one the poorest performers of the developing Asian region, and indeed of the entire sample of economies.
The report points out that it is particularly worrisome that Pakistan earns its lowest marks, with no sign of improvement, in the most basic areas of competitiveness, namely infrastructure, health and primary education, and the macro economic environment.
In order to benefit from the scale advantages associated with its significant market size, Pakistan will have to decrease regulatory rigidities in the labour market and reduce barriers to domestic and foreign competition in order to render the markets for goods and services more efficient.
Boosting the technological adoption of firms and the public at large would allow for considerable productivity increases in the country, suggests the report.
The report points out 15 most problematic factors for doing business in Pakistan, and these include: government instability/coups, corruption, policy instability, inadequate supply of infrastructure, inefficient government bureaucracy, access to financing, inflation, poor work ethic in national labour force, inadequately educated workforce, tax rates, crime and theft, tax regulations, foreign currency regulations, restrictive labour regulations and poor public health.
CEO of the Competitiveness Support Fund Shahab Khawaja said that “Pakistan is facing multiple challenges on its economic, security and globalisation front; however the policy-makers must not lose sight of long-term competitiveness fundamentals.
For the recovery to be put on a more stable footing, Pakistan must ensure that growth is based on productivity enhancements. The economy is struggling with fiscal challenges and anaemic growth, it needs to focus on competitiveness-enhancing measures in order to create a virtuous cycle of growth and ensure solid economic recovery,” he said.
“This year’s improvements in ranking also shows the continuous efforts that the CSF has been putting in identifying and advising the government on the key critical factors to improve competitiveness and economic growth in Pakistan”, said Shahab.
Switzerland tops the overall rankings in the Global Competitiveness Report 2011-2012, while Singapore overtakes Sweden for second position. Northern and Western European countries dominate the top 10 with Sweden (3rd), Finland (4th), Germany (6th), the Netherlands (7th), Denmark (8th) and the United Kingdom (10th). Japan remains the second-ranked Asian economy at 9th place, despite falling three places since last year.
“After a number of difficult years, a recovery from the economic crisis is tentatively emerging, although it has been very unequally distributed: much of the developing world is still seeing relatively strong growth, despite some risk of overheating, while most advanced economies continue to experience sluggish recovery, persistent unemployment and financial vulnerability, with no clear horizon for improvement,” said Klaus Schwab, Founder and Executive Chairman of the World Economic Forum.