HomeBusiness DigestZim slips down economic ladder

Zim slips down economic ladder

Berlin, Germany — ZIMBABWE has fallen six places down the global economic competitiveness ratings to beat only three other economies out of 139 ranked economies, a report says.

The Global Competitiveness Report 2010-2011 issued by the World Economic Forum (WEF) was released yesterday in Geneva.
According to the report, although there have been some improvements in individual areas, Zimbabwe continues to be among the lowest ranked countries included in the GCI survey.
“The assessment of public institutions, while still weak, has improved measurably, increasing from 125th last year to 113th this year. Specific areas of improvement are ethics and corruption (up from 122nd to 103rd), government inefficiency (up from 124th to 105th), and the security situation (up from 85th to 66th)” reads part of the report.

However, the report says “major concerns (still) linger with regard to the protection of property rights and undue influence.”
Despite efforts to improve macroeconomic environment — including the dollarization of its economy in early 2009 which brought down inflation and interest rates — the situation continues to be bad enough to place Zimbabwe towards the tail end out of all countries in this pillar (139th), notes the report.

Weaknesses were noted in the health sector (ranked 135th in the health sub-pillar), low educational enrolment rates, and official markets that continue to function with difficulty (particularly with regard to goods and labour markets, ranked 130th and 129th, respectively).

In sub-Saharan Africa, South Africa is ranked highest at 54th, and Mauritius (55th) features in the top half of the rankings, followed by second-tier best regional performers Namibia (74th), Botswana (76th) and Rwanda (80th).

The report corroborates findings by the World Bank/International Finance Corporation (IFC)’s Doing Business Report which said despite notable improvement in key indicators, Zimbabwe is still rated unfavourably for business. The two indices are the world’s most widely followed gauges of economic competitiveness.

The 2010 Doing Business Report ranked Zimbabwe 159 out of the 183 economies surveyed — one step up from 2009 when the sample was two countries smaller — citing persistent concerns over institutional barriers related to trade and investment.

The country is among the world’s worst economies in terms of investor protection and general ease of doing business. The ranks are important determinants of the global distribution of Foreign Direct Investment.

According to the report, Switzerland tops the overall rankings and the United States falls two places to fourth position, overtaken by Sweden (2nd) and Singapore (3rd), after already ceding the top place to Switzerland last year.

The report’s competitiveness ranking is based on the Global Competitiveness Index (GCI) developed for the WEF by Sala-i-Martin and introduced in 2004.

The GCI is based on 12 pillars of competitiveness, providing a comprehensive picture of the competitiveness landscape in countries around the world at all stages of development.

The pillars are: 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.

The rankings are calculated from both publicly available data and the Executive Opinion Survey, comprehensive annual surveys conducted by the World Economic Forum together with its network of Partner Institutes (leading research institutes and business organisations) in the countries covered by the study.

This year, over 13 500 business leaders were polled in 139 economies. The survey is designed to capture a broad range of factors affecting an economy’s business climate.

Nqobile Bhebhe

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