Mauritius races past SA in global competitiveness
Mauritius has overtaken South Africa on the World Economic Forum’s (WEF) Global Competitiveness Index, according to a report released by the Switzerland-based independent international organization on Wednesday.
Mauritius (45th) has improved its ranking by as many as nine places – on the back of transparent public institutions, an efficient private sector, and deepening financial markets – overtaking South Africa (53rd), which has been dragged down one place by labour discord, a failing education system and poor healthcare provision. Further, the higher research and development (R&D) spending by companies in Mauritius—which seem to be increasingly focussing on cutting-edge research, albeit from low base levels— has led to a significant enhancement in Mauritius’ innovative capacity.
“Innovation becomes even more critical in terms of an economy’s ability to foster future prosperity,” said Klaus Schwab, Founder and Executive Chairman, WEF. “I predict that the traditional distinction between countries being ‘developed’ or ‘less developed’ will gradually disappear and we will instead refer to them much more in terms of being ‘innovation rich’ vs. ‘innovation poor’ countries.”
Globally, excellent innovation and strong institutional environments are increasingly influencing economies’ competitiveness. The report places Switzerland at the top of the ranking for the fifth year running. Singapore and Finland remain in second and third positions respectively. Germany moves up two places (4th) and the United States reverses a four year downward trend, climbing two places to fifth. Hong Kong SAR (7th) and Japan (9th) also close the gap on the most competitive economies, while Sweden (6th), the Netherlands (8th) and the United Kingdom (10th) fall.
Coming back to the island nation, its tiny market size continues to be constrain its upward climb, and, while the labour market in Mauritius is relatively flexible, the country does not deploy its talent efficiently. Mauritius ranks 92nd in its capacity to retain talent, and the share of women in the labour force remains low at 118th. The low availability of scientists and engineers reinforces the impression of a stunted growth path for an otherwise well-educated work-force.
Moving on to the emerging market economies, the report notes that South Africa has overtaken Brazil to take second spot among the other fast-growing nations that comprise the BRICS quintet (Brazil, Russia, India, China and South Africa). The People’s Republic of China (29th) continues to lead the group, but with a stagnant ranking, followed by South Africa (53rd), down one place, Brazil (56th), down 8 places, India (60th), down one place and Russia (64th), up 3 places – the only BRICS nation to show an improved ranking. The Global Competitiveness Report goes on to credit South Africa’s financial sector regulations for protecting the country’s economy from the worst of the global crisis, awarding the country first place on the regulation of securities exchanges and second place on the availability of financial services.
For the rest of Africa, the report states that Sub-Saharan Africa continues its impressive growth rate of close to 5 percent in 2012 (with similar projections for the next two years), providing something of a silver lining in an otherwise uncertain global economy. Indeed, only emerging Asia registers higher growth. Growth has largely taken place on the backs of strong investment, favourable commodity prices, and a prudent macroeconomic stance.
However, regional variations continue to plague the region, so while a number of African middle-income economies – Botswana (74th), Namibia (90th), Zambia (93rd), Senegal (113th), Lesotho (123rd) and Swaziland (124th) –have improved, oil-producing economies – Gabon (112th), Cameroon (115th), Nigeria (120th) and Chad (148th) – show stagnation or a decline in the ranking. Also, among African low-income economies, Kenya shows a significant leap of 9 places to break into the top 100 countries at 96th place.
The 2013-14 index captured the opinions of more than 13,000 business leaders in 148 countries between January and May this year, focusing on the 12 pillars of institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication, and innovation.
Source: The World Economic Forum’s Global Competitiveness Report 2013-14
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