Pretoria - South Africa's economic competitiveness has improved for two years in a row, says Productivity SA.
According to the organisation tasked with improving productivity in all spheres of the economy, the country's ranking has moved four notches higher from 48th in 2009 to 44th this year out of a total of 58 selected countries. In 2008 South Africa was ranked 53rd.
The progress is an indication of the resilient nature of the country's economy despite the impact of the global economic and financial crises last year.
The results are from the annual World Competitiveness Yearbook (WCY) 2010 which was published by the Switzerland based Institute of Management Development (IMD) and is recognised internationally as the leading survey of competiveness between nations.
"South Africa's strong competitiveness is being linked to the increased level of portfolio investment assets and direct investment stocks inward, as investors divert their investments to emerging markets that were not too exposed to the financial crises in a bid to protect their investments," said the organisation's executive manager of value chain competitiveness Sello Mosai.
The IMD yearbook rates the ability of 58 industrialised and emerging economies and country data was evaluated through 327 criteria that was grouped into four competitive factors namely government efficiency, government efficiency, economic performance and infrastructure.
The improvement, Mosai said, was due to better labour market flexibility, improved current account balance, a better inflation outlook and the cost of living index.
However, Productivity SA cautions that the country should be worried about further decline of employment creation, exports and GDP in real terms due to the recession.
"There was also a reduction in business efficiency from 30th position to 31st position. Business efficiency was the only competitiveness factor where South Africa performed poor as compared to the previous year. It is extremely encouraging to see that, South Africa performed well in the other three competitiveness factor," said Mosai.
Performance in government efficiency improved five places from 26th to 21st while infrastructure improved by three places to 51st among the sampled countries.
"This shows that the investment of the S.A government in energy, transportation and infrastructure development through its Industrial and economic policies interventions is making progress".
South Africa performed better than Colombia, Mexico, Greece and Argentina among other countries.
The country performed poorly when compared to Australia (5), Malaysia (10), New Zealand (20) and Chile (28).
Productivity SA is governed by a tripartite council drawn from government, labour and business.
