Concern as SA drops in Global Competitiveness Index

Wednesday, September 27, 2017

Brand South Africa has expressed concern at South Africa’s declined performance in the 2017-2018 World Economic Forum Global Competitiveness Index (WEF GCI).

South Africa now ranks 61 out of 137 economies assessed in the annual survey published on Tuesday. The WEF’s GCI found Switzerland to be the world’s most competitive economy, narrowly ahead of the United States and Singapore.

Brand South Africa’s Chief Executive Officer Dr Kingsley Makhubela on Wednesday said the country’s declined competitiveness profile can be attributed to low Gross Domestic Product (GDP).

“South Africa’s declined competitiveness profile can be attributed to low GDP growth forecasts at just 1% in 2017 and 1.2 % in 2018 – hit by persistently low international demand for its commodities,” said Makhubela.

South Africa regressed 14 positions from the 2016-2017 WEF GCI results. Following on two years where the country made strong progress in the global competitiveness rankings, this year’s results are a wake-up call to the nation.

Makhubela said it is concerning that the financial sector has been affected by uncertainty.

“It is also concerning that the financial sector has been affected by uncertainty as can be seen in the dramatic drop in performance in this indicator, while historically low levels of business confidence have now clearly impacted on the competitiveness profile of the Nation Brand.

“We note decreasing competitiveness in institutions, macro-economic environment, goods and market efficiency, and financial market development. [This then means] that both government and the private sector should take heed of the deteriorating competitiveness indicators,” he said.

Brand SA said while it notes the overall drop in competitiveness of the South African economy, the country improved on labour market efficiency by four positions (93/137), infrastructure improved with three positions (61/137), and health and primary education with two positions (121/137).

“This means that all is not lost, however, as a nation there are several lessons to take from the WEF report indicators. As an open and transparent democratic system, leaders and public officials have to work much harder on maintaining high ethical standards in their conduct especially as it pertains to the fight against corruption and wastefulness in the public sector.

“Having said that, the private sector – especially in the financial sector, should pay attention to the drop in performance in the sector’s competitiveness,” said Dr Makhubela. 

It is important to note that the executive opinion survey sample had drastically increased between 2016 and 2017 from 44 to 170 respectively. This means that a completely new sample informed the opinion survey conducted for the 2017 index.

WEF notes that the year-on-year change in the sample constitutes a structural break in how the results are reflected. Additionally, unlike previous years, the South African Opinion Survey was solely conducted online.

Brand South Africa is the official marketing agency of South Africa, with a mandate to build the country's brand reputation, in order to improve its global competitiveness.

Its aim is also to build pride and patriotism among South Africans, in order to contribute to social cohesion and nation brand ambassadorship. - SAnews.gov.za

 

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