The World Economic Forum’s “Global Competitiveness Report, 2017-18,” published on Tuesday has surfaced at a time when the world is confronted with sharply increasing challenges of political and economic uncertainty even though many leading global economies continue to perform well and emerging markets are still catching up.
The Global Competitiveness Index (GCI) has identified 137 countries in the GCR in which the competitive analyses and country ranking are based on the Report’s 12 pillars. These are identified as:
(1) Institutions, infrastructure, macroeconomic environment, health and primary education, which are considered key elements in factor-driven economies.
(2) The key to efficiency-driven economies, beside higher education, is training, goods marketing efficiency, labour market efficiency, technical readiness and market size.
(3) Business sophistication and innovation is the key to innovation-driven economies.
Performance in all the above key drivers requires seamless engagement and action of the state, the business community, and civil society to achieve progress on all the stated factors of competitiveness.
This year the Report points to three main challenges and lessons that are relevant for economic progress, public-private collaboration, and policy action:
(1) Financial vulnerabilities pose a threat to competitiveness and to economies’ ability to finance innovation and technological adoption.
(2) Emerging economies are becoming better at innovation but more can be done to spread the benefits.
(3) Labour market flexibility and worker protection are needed for competitiveness and shared prosperity.
The top 10 competitive global economies in the order of ranking are evaluated under the Global Competitiveness Index:
2. The US
4. The Netherlands
6. Hong Kong
8. The UK
Pakistan’s ranking is 122, whereas Malaysia is at 22 and India at 39. Pakistan’s dwindling foreign direct investments and exports is a reflection of its pathetic global ranking as an economy which is competitive and hence attractive enough to invoke investments and compete in exports in the global arena of business.
Efforts to deal with this state of affairs are the prime responsibility of the state but also the collective responsibility of policymakers, business leaders, civil society leaders, academics, and the public at large.
All of them has a responsibility to evaluate Pakistan’s performance in the Global Competitiveness Index and work together to identify the main challenges and barriers to growth and design and implement policies to make our economies more competitive and meet the challenges of poverty and a growing middle class demanding better life and opportunities.
One of the key goals under Vision 2025 is to reduce corruption in Pakistan. Some global rules have been framed to arrest corruption. Safe havens to park money and conduct business lacking transparency still exist in the developed economies of the West, while the emerging economies are incited into corruptions through business deals signed between the developed and emerging markets.
Pakistan is one of the worst sufferers of corruption which has denied its people education, health-care, civic amenities, jobs and fair business opportunities. The system based on corruption puts up invisible barriers to entry for new businesses, to allow the incumbents to reap huge profits.
There is need for an equitable and fair political and economic world order where the affluent economies genuinely support the emerging and left-behind economies. This is not happening and the inequality between the affluent and deprived economy is widening. With China surfacing as a global economic and political power, new political and economic alignments are taking shape and China appears to be active in efforts to fill up this inequality, especially in Africa and Asia.
China’s power and influence is increasing, which changes its relationship with the US and Europe in areas such as trade, climate change, politics and security. China’s One Belt One Road initiative, first announced by Chinese President Xi Jinping at the World Economic Forum in Davos in January has managed to motivate many countries of Asia to align themselves more closely with China. In these difficult times of global political and economic realignments there is a need for a better understanding among nations.
(The writer is former President of Overseas Investors Chamber of Commerce and Industry)