Competitiveness report: Global ranking paints dismal picture of economy

Country is consistently ranked among the worst in business rankings.

ISLAMABAD:

Pakistan’s global competitiveness ranking has fallen by a further  six notches: the country is now ranked among the bottom 20 of the 144 economies surveyed, according to the World Economic Forum Global Competitiveness Report 2012-2013.

Countries including Uganda, Ghana and Ethiopia; and regional peers like Sri Lanka (ranked 68), Bangladesh and India (ranked 59); enjoy a higher rating than Pakistan. Pakistan, meanwhile, is placed at number 124 in a list of 144.

For the ranking, the World Economic Forum ranks countries on more than 100 economic indicators, and compares 144 countries. According to the Global Competitiveness Report, Pakistan lacks a long-term view of competitiveness. High levels of corruption and poor governance are some additional factors slowing down Pakistan’s economic growth.  On indicators likes public trust on politicians, irregular payments and bribes, favouritism in government decision making, wastefulness of government spending, business costs of terrorism, and business costs of crimes and violence, the country has been ranked among the worst.

On the index of business costs of terrorism, Pakistan scored the 143rd position. However, on the judicial independence index, Pakistan came in at a healthy 57. On the macroeconomic environment indicator, the country was clubbed with the bottom six countries in the index – and ranked at 139. On budget balancing, the country has been ranked at 125, on gross national savings 107, on the inflation index at 132, and on country credit rating, it has been ranked at 116 among the 144 nations.

The WEF gauged the performance of the country on the basis of 12 broad pillars.  Pakistan’s position on the 12 pillars is: on institutions 115, infrastructure 116, macroeconomic environment 139, health and primary education 117, higher education and training 124, goods market efficiency 97, labour market efficiency 130, financial market development 73, technological readiness 118, market size 30, business sophistication 78, and innovation 77.

“Pakistan has lost its competitive advantage on almost all the pillars of the competitiveness index, except for in health, primary education and labour market efficiency,” remarked Amir Jahangir, CEO of Mishal Pakistan – country partner of the Center of Global Competitiveness and Performance at the World Economic Forum.

The Pakistani business community identifies corruption as the most problematic factor for doing business in the country. The report indicates that Pakistan has failed to come up with effective regulations on intellectual property protection, where the country lost its position at 93 and slipped to 108 from 2011 to 2012.

Law and order problems have been a serious threat to economic activities; with the war on terror and targeted killings impacting business throughout the year. This reflects in the ranking, as the reliability of police service indicator has plunged to 127 in the current year, as compared to 116 in the previous one.

All is not bad, though. Pakistan has also progressed in some areas, such as in government regulation, where it improved from 76 in 2011, to 62 this year. Similarly, transparency in government policy making has also improved from 119 to 109.

The economy has shown flexibility in hiring and firing practices, and improved in the index from 33 last year to 21 this year. The pay and productivity index has also shown gains, wherein Pakistan has improved 13 points and now ranks at 73.

The report also indicates significant improvements on the performance of the Securities and Exchange Commission: Pakistan has improved on regulation of securities exchanges and is now ranked at 55, as compared to 70 last year.

Published in The Express Tribune, September 6^th, 2012.