ISLAMABAD
The World Economic Forum (WEF) on Thursday improved the Pakistan’s economic ranking by four ranks and noted that country is still passing through a difficult time.
Pakistan has been ranked at 129 out of the 144 economies around the world in the World Economic Forum’s (WEF) Global Competitiveness Report (GCR) 2014 - 2015, released on the 3rd of September. Pakistan’s raking was 133 during previous year 2013.
The Global Competitiveness Report 2014-2015 assesses the competitiveness landscape of 144 economies, providing insight into the drivers of their productivity, innovation and prosperity. The report findings show that Switzerland tops the overall rankings in the Global Competitiveness Report for the fifth consecutive year. Singapore remains in second position, the United States in third position, and Finland ranked at 4th. Germany 5, Japan 6, Hong Kong 7, The Netherlands 8, the United Kingdom 9, and Sweden ranked at 10.
The report evaluates that among the South Asia Association for Regional Cooperation (SAARC), Pakistan is the at the last among the SAARC member countries at 129, whereas India is at 71, Sri Lanka at 73, Nepal at 102, Bhutan at 103, Bangladesh at 109. Afghanistan and Maldives have not been included in the report this year. However India and Sri Lanka both lost 11 and 8 points respectively as compared to last year.
“Although Pakistan has shown slight improvements on the Global Competitiveness Index, it is still passing though a difficult time”, said Amir Jahangir, Chief Executive Officer of Mishal Pakistan, the country partner institute of the Global Competitiveness and Benchmarking Network of the World Economic Forum. He further said “Pakistan is facing serious challenges on the economic management side; with a double-digit inflation, very low savings rate of 13.2% of the GDP, general government debt at 63.1% of GDP and the 8% budget deficit gives little room for government to create socio-economic dividends for its citizens”. “Pakistan needs to make competitiveness as part of its growth and stabilization strategy for sustainable development across all factors of economy”, Jahangir said.
This year report consists of three main indexes and 12 pillars. Among 144 economies, Pakistan ranked in basic requirements at 142, in efficiency enhancers at 104 and in innovation and sophistication factors ranked at 78. All the 12 pillars included into the report ranks Pakistan as follows: Institutions are ranked at 123, infrastructure at 121, macroeconomic environment at 145, health and primary education at 128, higher education and training at 129, goods market efficiency at 103, labor market efficiency at 138, financial market development at 67, technological readiness at 118, market size at 30, business sophistication at 85 and innovation at 77.
After two consecutive years of steep decline, Pakistan (129th) remains essentially stable since last year. The country obtains low marks in the most critical and basic areas of competitiveness. Its public institutions (125th) are constrained by red tape, corruption, patronage, and lack of property rights protection. Its security situation remains alarming (142nd). Pakistan is the third least safe countries covered, behind only Yemen and Libya.
Thanks to a lower inflation rate and a smaller budget deficit, the country’s macroeconomic situation improves slightly but nevertheless remains dismissal (137th). Pakistan’s infrastructure (119th) particularly for electricity (133rd) is underdeveloped. Moreover, the country’s performance in terms of health and education is among the worst of all the countries covered. Infant mortality (137th) is the highest outside sub-Saharan Africa, and with one of the lowest enrollment rates in the world (132nd) is the estimated that almost a quarter of children do not go to primary school.
Pakistan’s competitiveness is further penalized by the many rigidities and inefficiencies of its labor market (132nd, up six). Female participation in the labor force is the world’s fifth lowest (140th). The potential for ICTs is not sufficiently leveraged and access to ICTs remain low (114th). On a slightly more positive note, Pakistan does comparatively better in the more advanced areas captured by the Global Competitiveness Index ranking 72nd in the financial development pillar and 81st on the business sophistication pillar.
The most problematic areas in doing business in Pakistan stipulated in the report include corruption as the leading factor, along with, policy instability, access to financing, inefficient government bureaucracy, inflation, inadequate supply of infrastructure, government instability/coups, crime and theft, inadequately educated workforce, tax rates, tax regulations, poor public health and insufficient capacity to innovate.
The World Economic Forum’s Global Competitiveness Report is the most influential ranking of a country’s economic competitiveness and it affects Pakistan’s image in the world among business, governments and financial leaders. The Report series remains the most comprehensive assessment of national competitiveness worldwide.
The Global Competitiveness Report’s competitiveness ranking is based on the Global Competitiveness Index (GCI), which was introduced by the World Economic Forum in 2004.
Mishal Pakistan is the country partner institute of the Center for Global Competitiveness and Benchmarking Networks of the World Economic Forum. Established in 2003, Mishal has been engaged with key stakeholders in Pakistan to improve the state of competitiveness and media through good governance initiatives and by creating appreciation for data journalism.