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India 48th in global competitiveness

Dharam Shourie in New York

The Indian economy showed a substantial strengthening in its global position even as the United States became the most competitive economy in the world, a new World Economic Forum report says ( Global Competitiveness Report 2002-2003).

India's ranking improved by eight places - a jump from 57 to 48 - according to the Global Competitiveness Report 2002-2003 released by the WEF.

Much of India's gain in the Growth Competitiveness Index stems from its performance in the technology and macroeconomic environment indices, with the country showing the best improvement in macroeconomic performance, the report said.

The annual report measures the comparative strengths and weaknesses of 80 national economies.

Despite concerns about possible war, corporate scandals and slow economic recovery, the US dethroned Finland from the top rank in the GCI, with the latter taking second spot.

The US owes its high ranking mainly to its performance in technology-related areas and a business environment that aids entrepreneurship and risk-taking, the report said.

China went up from 39 to 33. Sri Lanka improved its ranking by two places from 61 to 59, while Bangladesh slipped from 74 to 71.

As for microeconomic competitiveness, India slipped one position to rank 37, while China moved up to 38 from 43 in the Microeconomic Competitiveness Index.

The report showed a wide divergence of performance among the European countries, with Sweden and Switzerland rising to fourth and fifth positions, while France and Italy fell to 30th and 39th positions, respectively.

"The US economy has proven to be remarkably resilient and the fundamentals are in place for sustained growth in the US," said Peter Cornelius, Chief Economist, WEF.

"That the United States is ranked number one in both the Growth Competitiveness Index and the Microeconomic Competitiveness Index should not lead to complacency for to maintain this leading position, the country has to resolve outstanding reform issues, especially the need to improve its governance system, low savings rate and the ballooning trade deficit," Cornelius said.

The report shows that Japan is moving up in the competitiveness ranking. Despite deterioration in its macroeconomic environment and public institutions index rankings, Japan's position rose in the overall GCI, with technological innovation as the key driver.

Crisis countries Argentina and Turkey experienced the largest drop in this year's GCI rankings. Future growth prospects of both countries look particularly 'concerning because the decline was not only due to lower macroeconomic environment scores.'

Turkey showed the worst performance, slipping by 16 spots, dragged down primarily by a worsening performance in public institutions.

The biggest changes were experienced by Switzerland, which climbed from 15th to sixth place in the GCI index, thanks to a dramatic improvement in the field of technology.

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