Singapore loses top spot in global competitiveness ranking on unfavourable geography

SINGAPORE is no longer the world’s most competitive economy, a spot it has held for the past two years.

In the latest Institute for Management Development (IMD) World Competitiveness Ranking 2021, Singapore now ranks as the fifth most competitive economy globally, while Switzerland took its place at the top. Sweden, Denmark and the Netherlands followed in second, third and fourth place on the ranking respectively.

Researchers attributed Singapore’s fall in rankings to an unfavourable geography, among other reasons.

“Geography has played a pivotal role for some economies and while Singapore has done everything correctly, its physical geography has caused it to work harder than other economies and therefore it fell in the rankings,” said IMD in a statement.

According to IMD’s ranking analysis report, policy stability and predictability was ranked as the most attractive key factor out of 15 other factors, while cost competitiveness was perceived to be the least attractive factor for the country.

Singapore had also displayed a poorer economic performance, coupled with rising unemployment. With the exception of management practices, all components of business efficiency had dropped in varying degrees, with a greater decline in productivity and efficiency, finance, and attitudes and values, said IMD’s economists.

Though not the first worldwide, Singapore still retains its place as the most competitive country in Asia, even as most Asian economies had declined in ranking.

China, however, jumped the most significantly among the Asian economies, moving up the ranks by four positions to emerge as 16th on the rankings.

IMD estimates China would soon emerge to be in the top five positions globally.

“China, by continuing reducing poverty and boosting infrastructure and education, strengthens the possibility of advancing in the rankings,” said Arturo Bris, director of the World Competitiveness Center.

“Still, China does not rank among the top 10 most competitive economies despite its size and GDP (gross domestic product) growth potential. But this is what competitiveness is about, prosperity, not necessarily growth.”

Interestingly, Taiwan emerged in the top 10 globally for the first time since the rankings began 33 years ago in 1989.

This year’s results expose the strengths and weaknesses of the world’s economies under the litmus test of the Covid-19 pandemic and how economies that were caught most off guard with managing the health side of the pandemic were not necessarily those that suffered the most on an economic level, said IMD.

The IMD World Competitiveness Ranking, produced annually by the IMD World Competitiveness Center, ranks 64 economies via a mixture of hard data and survey responses from executives. It considers a number of factors when ranking economies, including economic performance, government efficiency, business efficiency and infrastructure.

Source: https://www.businesstimes.com.sg/government-economy/singapore-loses-top-spot-in-global-competitiveness-ranking-on-unfavourable