Dubai The global financial crisis has taken a toll in the competitiveness of the world’s major economies, while countries in the emerging markets and the Middle East have improved rankings in the latest episode of the Global Competitiveness Report 2012-13 released on Wednesday by the World Economic Forum.

Switzerland, for the fourth consecutive year, tops the overall rankings while Singapore remains in second position and Finland in third position, overtaking Sweden (4th). These and other Northern and Western European countries dominate the top 10 with the Netherlands (5th), Germany (6th) and United Kingdom (8th). The United States (7th), Hong Kong (9th) and Japan (10th) complete the ranking of the top 10 most competitive economies.

“Despite growing its overall competitiveness score, the United States continues its decline for the fourth year in a row, falling two more places to seventh position,” the report says.

“In addition to the burgeoning macroeconomic vulnerabilities, some aspects of the country’s institutional environment continue to raise concern among business leaders, particularly the low public trust in politicians and a perceived lack of government efficiency. On a more positive note, the country still remains a global innovation powerhouse and its markets work efficiently.”

Countries in Southern Europe, i.e. Portugal (49th), Spain (36th), Italy (42nd) and particularly Greece (96th) continue to suffer from competitiveness weaknesses in terms of macroeconomic imbalances, poor access to financing, rigid labour markets and an innovation deficit, the report shows.

“Persisting divides in competitiveness across regions and within regions, particularly in Europe, are at the origin of the turbulence we are experiencing today, and this is jeopardizing our future prosperity.” Klaus Schwab, Founder and Executive Chairman, World Economic Forum, said in a statement. “We urge governments to act decisively by adopting long-term measures to enhance competitiveness and return the world to a sustainable growth path.”

The report indicates that Switzerland and countries in Northern Europe have been consolidating their strong competitiveness positions since the financial and economic downturn in 2008.

The UAE
The UAE has improved its ranking by three to the 24th position from last year’s 27. However, The UAE is the only Arab country included in the top category of leading economies – Global Economics driven by Innovation.

Reem Al-Hashimy, Minister of State and Chairwoman of the Emirates Competitiveness Council, noted that it reflects the government’s endeavors to diversify the economy and create a robust business environment that enables creativity and entrepreneurship to be translated into innovative goods and services.  She lauded all levels of government that she noted were “working concertedly to put in place the framework-the policies and the institutions—for an economy that relies increasingly on innovation for sustained growth, enhancing competitiveness.” She attributed the UAE’s rapid economic progress to the country’s visionary leadership, stressing their “on-going commitment and dedication to achieving the UAE’s Vision 2021 to become a diversified, knowledge-driven economy that is among the most competitive in the world.”

In the Middle East and North Africa, Qatar (11th) leads the region while Saudi Arabia remains among the top 20 (18th). While Kuwait (37th) slightly declines, Morocco (70th) and Jordan (63rd) improve slightly. “However, most countries in the region continue to require efforts across the board to improve their competitiveness,” the report says.

Emerging Markets
The large emerging market economies (BRICS) display different performances. Despite a slight decline in the rankings of three places, the People’s Republic of China (29th) continues to lead the group. Of the others, only Brazil (48th) moves up this year, with South Africa (52nd), India (59th) and Russia (67th) experiencing small declines in rankings.

Behind Singapore, several Asian economies are performing strongly, with Hong Kong SAR (9th), Japan (10th), Taiwan, China (13th) and the Republic of Korea (19th) all in the top 20.

In Latin America, Chile (33rd) retains the lead and a number of countries see their competitiveness improve, such as Panama (40th), Brazil (48th), Mexico (53rd) and Peru (61st). Read more highlights of the report.

Xavier Sala-i-Martin, Professor of Economics, Columbia University, USA, said: “The Global Competitiveness Index provides a window on the long-term trends that are shaping the competitiveness of the world’s economies. In this light, we believe it offers useful insight into the key areas where countries must act if they are to optimize the productivity that will determine their economic future.”