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Wef gcr report_2011-12

  1. 1. The GlobalCompetitiveness Report2011–2012Klaus Schwab, World Economic Forum The Global Competitiveness Report 2011-2012 © 2011 World Economic Forum
  2. 2. World Economic ForumGeneva, Switzerland 2011 Professor Klaus Schwab World Economic Forum EditorThe GlobalCompetitiveness Report2011–2012Professor Xavier Sala-i-MartinColumbia UniversityChief Advisor of the Centre for Global Competitiveness and Performance The Global Competitiveness Report 2011-2012 © 2011 World Economic Forum
  3. 3. The Global Competitiveness Report 2011– World Economic Forum2012 is published by the World Economic GenevaForum within the framework of the Centre forGlobal Competitiveness and Performance Copyright © 2011 by the World Economic ForumProfessor Klaus Schwab All rights reserved. No part of this publicationExecutive Chairman may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means,Professor Xavier Sala-i-Martin electronic, mechanical, photocopying, or other- otherChief Advisor of the Centre for Global wise without the prior permission of the WorldCompetitiveness and Performance Economic Forum.Robert Greenhill ISBN-13: 978-92-95044-74-6Chief Business Officer ISBN-10: 92-95044-74-6 This book is printed on paper suitable forCENTRE FOR GLOBAL COMPETITIVENESS AND PERFORMANCE recycling and made from fully managed andJennifer Blanke, Senior Director, Lead sustained forest sources.Economist, Head of the Centre for GlobalCompetitiveness and Performance Printed and bound in Switzerland by SRO-Kundig.Beñat Bilbao-Osorio, Associate Director,EconomistRoberto Crotti, Junior QuantitativeEconomistMargareta Drzeniek Hanouz, Director,Senior EconomistBrindusa Fidanza, Associate Director,Environmental InitiativesThierry Geiger, Associate Director,EconomistCiara Browne, Associate DirectorPearl Samandari, Community ManagerSatu Kauhanen, CoordinatorWe thank Hope Steele for her superb edit-ing work and Neil Weinberg for his excellentgraphic design and layout. We are grateful toDjemila Zouyene for her invaluable researchassistance.The terms country and nation as used in thisreport do not in all cases refer to a territorialentity that is a state as understood by inter- international law and practice. The terms coverwell-defined, geographically self-containedeconomic areas that may not be states butfor which statistical data are maintained on aseparate and independent basis. The Global Competitiveness Report 2011-2012 © 2011 World Economic Forum
  4. 4. ContentsPartner Institutes v Part 2: Data Presentation 85Preface xiii 2.1 Country/Economy Profiles 87by Klaus Schwab and Robert Greenhill How to Read the Country/Economy Profiles ................................89 List of Countries/Economies .........................................................91 Country/Economy Profiles.............................................................92Part I: Measuring Competitiveness 1 2.2 Data Tables 377 How to Read the Data Tables .....................................................379 Index of Data Tables ...................................................................3811.1 The Global Competitiveness Index 2011–2012: 3 Data Tables..................................................................................383Setting the Foundations for Strong Productivityby Xavier Sala-i-Martin, Beñat Bilbao-Osorio, Jennifer Blanke,Margareta Drzeniek Hanouz, and Thierry Geiger Technical Notes and Sources 5211.2 The Long-Term View: Developing a Framework for 51 About the Authors 525Assessing Sustainable Competitivenessby Jennifer Blanke, Roberto Crotti, Margareta Drzeniek Hanouz,Brindusa Fidanza, and Thierry Geiger Acknowledgments 5271.3 The Executive Opinion Survey: An Indispensable 75Tool in the Assessment of National Competitivenessby Ciara Browne and Thierry Geiger The Global Competitiveness Report 2011-2012 © 2011 World Economic Forum
  5. 5. The Global Competitiveness Report 2011-2012 © 2011 World Economic Forum
  6. 6. Partner InstitutesPartner InstitutesThe World Economic Forum’s Centre for Global Bangladesh Centre for Policy Dialogue (CPD)Competitiveness and Performance is pleased to Mustafizur Rahman, Executive Directoracknowledge and thank the following organizations Khondaker Golam Moazzem, Senior Research Fellowas its valued Partner Institutes, without which the Kishore Kumer Basak, Research Associaterealization of The Global Competitiveness Report 2011– Barbados2012 would not have been feasible: Arthur Lewis Institute for Social and Economic Studies, University of West Indies (UWI)Albania Andrew Downes, DirectorInstitute for Contemporary Studies (ISB)Artan Hoxha, President BelgiumElira Jorgoni, Senior Expert and Project Manager Vlerick Leuven Gent Management SchoolDenalada Kuzumi, Researcher Priscilla Boairdi, Associate, Competence Centre Entrepreneurship, Governance and StrategyAlgeria Wim Moesen, ProfessorCentre de Recherche en Economie Appliquée pour le Leo Sleuwaegen, Professor, Competence Centre Développement (CREAD) Entrepreneurship, Governance and StrategyYoucef Benabdallah, Assistant ProfessorYassine Ferfera, Director Benin CAPOD—Conception et Analyse de Politiques deAngola DéveloppementMITC Investimentos Epiphane Adjovi, Director vEstefania Jover, Senior Adviser Maria-Odile Attanasso, Deputy CoordinatorSouth Africa-Angola Chamber of Commerce (SA-ACC) Fructueux Deguenonvo, ResearcherRoger Ballard-Tremeer, Hon Chief Executive Bosnia and HerzegovinaArgentina MIT Center, School of Economics and Business in Sarajevo,IAE—Universidad Austral University of SarajevoCristian Alonso, Project Manager Zlatko Lagumdzija, ProfessorEduardo Luis Fracchia, Professor Zeljko Sain, Executive Director Jasmina Selimovic, Assistant DirectorArmeniaEconomy and Values Research Center BotswanaManuk Hergnyan, Chairman Botswana National Productivity CentreSevak Hovhannisyan, Board Member and Senior Associate Letsogile Batsetswe, Research Consultant and StatisticianGohar Malumyan, Research Associate Parmod Chandna, Acting Executive Director Phumzile Thobokwe, Manager, Information and ResearchAustralia Services DepartmentAustralian Industry GroupCarola Lehmer, Senior Research Coordinator BrazilHeather Ridout, Chief Executive Fundação Dom CabralNikki Wilson, Administrative Assistant Marina Araújo, Economist and Researcher, The Competitiveness and Innovation CenterAustria Carlos Arruda, Executive Director, International AdvisoryAustrian Institute of Economic Research (WIFO) Council and Professor, The Competitiveness andKarl Aiginger, Director Innovation CenterGerhard Schwarz, Coordinator, Survey Department Fabiana Madsen, Economist and Researcher, TheAzerbaijan Competitiveness and Innovation CenterAzerbaijan Marketing Society Movimento Brasil Competitivo (MBC)Fuad Aliyev, Project Manager Erik Camarano, Director PresidentAshraf Hajiyev, Consultant Nikelma Moura, Communications Assistant Tatiana Ribeiro, Project CoordinatorBahrainBahrain Competitiveness Council, Bahrain Economic Brunei Darussalam Development Board Ministry of Industry and Primary ResourcesNada Azmi, Manager, Economic Planning and Development Pehin Dato Yahya Bakar, MinisterMohammed bin Essa Al-Khalifa, Chief Executive Dato Dr Amin Abdullah, Permanent SecretaryMaryam Matter, Coordinator, Economic Planning and Development Bulgaria Center for Economic Development Anelia Damianova, Senior Expert The Global Competitiveness Report 2011-2012 © 2011 World Economic Forum
  7. 7. Partner Institutes Burkina Faso Croatia lnstitut Supérieure des Sciences de la Population (ISSP), National Competitiveness Council University of Ouagadougou Jadranka Gable, Project Administrator Samuel Kabore, Economist and Head of Development Kresimir Jurlin, Research Associate Strategy and Population Research Mira Lenardic, Senior Advisor Burundi Cyprus University Research Centre for Economic and Social Cyprus College Research Center Development (CURDES), National University of Burundi Bambos Papageorgiou, Head of Socioeconomic and Banderembako Deo, Director Academic Research Gilbert Niyongabo, Dean, Faculty of Economics & cdbbank—The Cyprus Development Bank Management Maria Markidou-Georgiadou, Manager, International Business Cambodia Banking Economic Institute of Cambodia Czech Republic Sok Hach, President CMC Graduate School of Business Seiha Neou, Research Manager Tomas Janca, Executive Director Sokheng Sam, Researcher Denmark Cameroon Innoption EMEA ApS Comité de Compétitivité (Competitiveness Committee) Carsten Snedker, Managing Partner Lucien Sanzouango, Permanent Secretary Ecuador Canada ESPAE Graduate School of Management, Escuela Superior The Conference Board of Canada Politécnica del Litoral (ESPOL) Michael R. Bloom, Vice-President, Organizational Elizabeth Arteaga, Project Assistant Effectiveness & Learning Virginia Lasio, Director Anne Golden, President and Chief Executive Officer Sara Wong, Professor P. Derek Hughes, Senior Research Associate Egypt Cape Verde The Egyptian Center for Economic Studies INOVE RESEARCH—Investigação e Desenvolvimento, Lda Iman Al-Ayouty, Senior Economist Sara Mendes, Senior Researcher Omneia Helmy, Deputy Director of Research and Lead Júlio Delgado, Partner and Senior Researcher Economist Frantz Tavares, Partner and Chief Executive Officer Magda Kandil, Executive Director and Director of Researchvi Chad Estonia Groupe de Recherches Alternatives et de Monitoring du Estonian Institute of Economic Research Projet Pétrole-Tchad-Cameroun (GRAMP-TC) Evelin Ahermaa, Head of Economic Research Sector Antoine Doudjidingao, Researcher Marje Josing, Director Gilbert Maoundonodji, Director Celine Nénodji Mbaipeur, Programme Officer Estonian Development Fund Kitty Kubo, Head of Foresight Chile Ott Pärna, Chief Executive Officer Universidad Adolfo Ibáñez Fernando Larrain Aninat, Director of the Master in Ethiopia Management and Public Policy, School of Government African Institute of Management, Development and Camila Chadwick, Project Coordinator Governance Leonidas Montes, Dean, School of Government Tegegne Teka, General Manager China Finland Institute of Economic System and Management ETLA—The Research Institute of the Finnish Economy National Development and Reform Commission Petri Rouvinen, Research Director Zhou Haichun, Deputy Director and Professor Markku Kotilainen, Research Director Chen Wei, Research Fellow Pekka Ylä-Anttila, Managing Director Dong Ying, Professor France China Center for Economic Statistics Research, HEC School of Management, Paris Tianjin University of Finance and Economics Bertrand Moingeon, Professor and Deputy Dean Lu Dong, Professor Bernard Ramanantsoa, Professor and Dean Hongye Xiao, Professor Gambia, The Bojuan Zhao, Professor Gambia Economic and Social Development Research Institute Huazhang Zheng, Associate Professor (GESDRI) Colombia Makaireh A. Njie, Director National Planning Department Georgia Alvaro Edgar Balcazar, Entrepreneurial Development Director Business Initiative for Reforms in Georgia Hernando José Gómez, General Director Tamara Janashia, Executive Director Nelson Fabián Villareal Rincón, Advisor Giga Makharadze, Founding Member of the Board of Colombian Council of Competitiveness Directors Rosario Córdoba, President Mamuka Tsereteli, Founding Member of the Board of Directors Côte d’Ivoire Chambre de Commerce et d’Industrie de Côte d’Ivoire Jean-Louis Billon, President Jean-Louis Giacometti, Technical Advisor to the President Mamadou Sarr, Director General The Global Competitiveness Report 2011-2012 © 2011 World Economic Forum
  8. 8. Partner InstitutesGermany IrelandIW Consult GmbH, Cologne Institute for Economic Research Competitiveness Survey Group, Department of Economics,Adriana Sonia Neligan, Head of Department University College Cork Eleanor Doyle, Professor, Department of EconomicsWHU—Otto Beisheim School of Management, Vallendar Niall O’SullivanRalf Fendel, Professor of Monetary Economics Bernadette PowerMichael Frenkel, Professor, Chair of Macroeconomics and International Economics National Competitiveness Council Adrian Devitt, ManagerGhana Michelle Nic Gearailt, Assistant EconomistAssociation of Ghana Industries (AGI)Patricia Djorbuah, Projects Officer IsraelCletus Kosiba, Executive Director Manufacturers’ Association of Israel (MAI)Nana Owusu-Afari, President Shraga Brosh, President Dan Catarivas, DirectorGreece Amir Hayek, Managing DirectorSEV Hellenic Federation of EnterprisesMichael Mitsopoulos, Coordinator, Research and Analysis ItalyThanasis Printsipas, Economist, Research and Analysis SDA Bocconi School of Management Secchi Carlo, Full Professor of Economic Policy, BocconiGuatemala UniversityFUNDESA Paola Dubini, Associate Professor, Bocconi UniversityEdgar A. Heinemann, President of the Board of Directors Francesco A. Saviozzi, SDA Assistant Professor,Pablo Schneider, Economic Director Strategic and Entrepreneurial Management DepartmentJuan Carlos Zapata, General Manager JamaicaGuyana Mona School of Business (MSB), The University of the WestInstitute of Development Studies, University of Guyana IndiesKaren Pratt, Research Associate Patricia Douce, Project AdministratorClive Thomas, Director Evan Duggan, Executive Director and ProfessorHaiti William Lawrence, Director, Professional Services UnitPrivate Sector Economic Forum JapanEdouard Baussan, Deputy Coordinator Keio University in cooperation with Keizai Doyukai KeizaiReginald Boulos, Coordinator (Japan Association of Corporate Executives)Bernard Craan, Secretary General Yoko Ishikura, Professor,Graduate School of Media Design, Keio University viiHong Kong SARHong Kong General Chamber of Commerce Kiyohiko Ito, Managing Director, Keizai DoyukaiDavid O’Rear, Chief Economist Heizo Takenaka, Director, Global Security Research Institute, Keio UniversityFederation of Hong Kong IndustriesAlexandra Poon, Director Jordan Ministry of Planning & International CooperationThe Chinese General Chamber of Commerce Jordan National Competitiveness TeamHungary Mukhallad Omari, Director of Policies and StudiesKOPINT-TÁRKI Economic Research Ltd. DepartmentPeter Vakhal,, Project Manager Aktham Al-Zubi, Senior ResearcherÉva Palócz, Chief Executive Officer Kawther Al-Zou’bi, Head of Competitiveness DivisionIceland KazakhstanInnovation Center Iceland JSC “National Analytical Centre of the Government of theKarl Fridriksson, Managing Director of Human Resources and Republic of Kazakhstan” Marketing Takhir Aslyaliyev, Project ManagerArdis Armannsdottir, Marketing Manager Ayana Manasova, ChairpersonThorsteinn I. Sigfusson, Director Alikhan Yerzhanov, Expert AnalystIndia KenyaConfederation of Indian Industry (CII) Institute for Development Studies, University of NairobiChandrajit Banerjee, Director General Mohamud Jama, Director and Associate ProfessorMarut Sengupta, Deputy Director General Paul Kamau, Senior Research FellowGantakolla Srivastava, Head, Financial Services Dorothy McCormick, Research ProfessorIndonesia Korea, Republic ofCenter for Industry, SME & Business Competition Studies, College of Business School, Korea Advanced Institute of University of Trisakti Science and Technology KAISTTulus Tambunan, Professor and Director Ingoo Han, Senior Associate Dean and Professor Byungtae Lee, Acting DeanIran, Islamic Republic of Professor Kayla Jisoo Lee, Manager, Exchange ProgrammeThe Centre for Economic Studies and Surveys (CESS), Iran Chamber of Commerce, Industries and Mines Korea Development InstituteHammed Roohani, Director Joohee Cho, Senior Research Associate Yongsoo Lee, Head, Policy Survey Unit The Global Competitiveness Report 2011-2012 © 2011 World Economic Forum
  9. 9. Partner Institutes Kuwait Mauritania Kuwait National Competitiveness Committee Centre d’Information Mauritanien pour le Développement Adel Al-Husainan, Committee Member Economique et Technique (CIMDET/CCIAM) Fahed Al-Rashed, Committee Chairman Khira Mint Cheikhnani, Director Sayer Al-Sayer, Committee Member Lô Abdoul, Consultant and Analyst Habib Sy, Analyst Kyrgyz Republic Economic Policy Institute “Bishkek Consensus” Mauritius Lola Abduhametova, Program Coordinator Joint Economic Council of Mauritius Marat Tazabekov, Chairman Raj Makoond, Director Latvia Board of Investment Institute of Economics, Latvian Academy of Sciences Kevin Bessondyal, Assistant Director, Planning and Policy Helma Jirgena, Director Dev Chamroo, Director, Planning and Policy Irina Curkina, Researcher Raju Jaddoo, Managing Director Lebanon Mexico Bader Young Entrepreneurs Program Center for Intellectual Capital and Competitiveness Antoine Abou-Samra, Managing Director Erika Ruiz Manzur, Executive Director Hiba Zunji, Assistant René Villarreal Arrambide, President and Chief Executive Officer Lesotho Jesús Zurita González, General Director Private Sector Foundation of Lesotho Instituto Mexicano para la Competitividad (IMCO) O.S.M. Moosa, Chaiperson Priscila Garcia, Researcher Tiisetso Sekhonyana, Researcher Manuel Molano, Deputy General Director Lindiwe Sephomolo, Chief Executive Officer Juan E. Pardinas, General Director Lithuania Ministry of the Economy Statistics Lithuania . . Jose Antonio Torre, Undersecretary for Competitiveness and Vilija Lapeniene, Director General Standardization Gediminas Samuolis, Head, Knowledge Economy and Special Enrique Perret Erhard, Technical Secretary for Surveys Statistics Division . Competitiveness Ona Grigiene, Deputy Head, Knowledge Economy and Narciso Suarez, Research Director, Secretary for Special Surveys Statistics Division Competitiveness Luxembourg Moldovaviii Chamber of Commerce of the Grand Duchy of Luxembourg Academy of Economic Studies of Moldova (AESM) François-Xavier Borsi, Attaché, Economic Department Grigore Belostecinic, Rector Carlo Thelen, Chief Economist, Member of the Managing Board Centre for Economic Research (CER) Christel Chatelain, Attachée, Economic Department Corneliu Gutu, Director Macedonia, FYR Mongolia National Entrepreneurship and Competitiveness Council Open Society Forum (OSF) (NECC) Munkhsoyol Baatarjav, Manager of Economic Policy Dejan Janevski, Project Coordinator Erdenejargal Perenlei, Executive Director Zoran Stavreski, President of the Managing Board Montenegro Saso Trajkoski, Executive Director Institute for Strategic Studies and Prognoses (ISSP) Madagascar Maja Drakic, Project Manager Centre of Economic Studies, University of Antananarivo Petar Ivanovic, Chief Executive Officer Ravelomanana Mamy Raoul, Director Veselin Vukotic, President Razato Rarijaona Simon, Executive Secretary Morocco Malawi Université Hassan II, LASAARE Malawi Confederation of Chambers of Commerce and Fouzi Mourji, Professor of Economics Industry General Confederation of Moroccan Entreprise (CGEM) Hope Chavula, Public Private Dialogue Manager Mounir Ferram, Delegate Director Chancellor L. Kaferapanjira, Chief Executive Officer Mozambique Malaysia EconPolicy Research Group, Lda. Institute of Strategic and International Studies (ISIS) Peter Coughlin, Director Mahani Zainal Abidin, Chief Executive Donaldo Miguel Soares, Researcher Steven C.M. Wong, Senior Director, Economics Ema Marta Soares, Assistant Malaysia Productivity Corporation (MPC) Namibia Mohd Razali Hussain, Director General Institute for Public Policy Research (IPPR) Lee Saw Hoon, Senior Director Graham Hopwood, Executive Director Mali Nepal Groupe de Recherche en Economie Appliquée et Théorique Centre for Economic Development and Administration (GREAT) (CEDA) Massa Coulibaly, Coordinator Ramesh Chandra Chitrakar, Professor and Country Malta Coordinator Competitive Malta—Foundation for National Competitiveness Bharat Pokharel, Project Director and Executive Director Margrith Lutschg-Emmenegger, Vice President Mahendra Raj Joshi, Member Adrian Said, Chief Coordinator Caroline Sciortino, Research Coordinator The Global Competitiveness Report 2011-2012 © 2011 World Economic Forum
  10. 10. Partner InstitutesNetherlands Puerto RicoINSCOPE: Research for Innovation, Erasmus University Puerto Rico 2000, Inc. Rotterdam Suzette M. Jimenez, PresidentFrans A. J. Van den Bosch, Professor Francisco Montalvo Fiol, Project CoordinatorHenk W. Volberda, Director and Professor QatarNew Zealand Qatari Businessmen Association (QBA)Business New Zealand Issa Abdul Salam Abu Issa, Secretary-GeneralPhil O’Reilly, Chief Executive Sarah Abdallah, Deputy General ManagerThe New Zealand Institute RomaniaCatherine Harland, Project Leader Group of Applied Economics (GEA)Rick Boven, Director Liviu Voinea, Executive Director Irina Zgreaban, Program CoordinatorNigeriaNigerian Economic Summit Group (NESG) Russian FederationFrank Nweke Jr., Director General Bauman Innovation & Eurasia Competitiveness InstituteChris Okpoko, Associate Director, Research Katerina Marandi, Programme ManagerFoluso Phillips, Chairman Alexey Prazdnichnykh, Principal and Managing DirectorNorway Stockholm School of Economics, RussiaBI Norwegian School of Management Igor Dukeov, Area PrincipalEskil Goldeng, Researcher Carl F. Fey, Associate Dean of ResearchTorger Reve, Professor RwandaOman Private Sector FederationThe International Research Foundation Roger Munyampenda, Chief Executive OfficerSalem Ben Nasser Al-Ismaily, Chairman Vincent S. Safari, Director, Trade and Policy AdvocacyPublic Authority for Investment Promotion and Export Saudi Arabia Development (PAIPED) National Competitiveness Center (NCC)Mehdi Ali Juma, Expert for Economic Research Awwad Al-Awwad, President Khaldon Mahasen, Vice PresidentPakistanCompetitiveness Support Fund SenegalMaryam Jawaid, Communication Specialist Centre de Recherches Economiques Appliquées (CREA),Imran Khan, Economist University of DakarShahab Khawaja, Chief Executive Officer ix Diop Ibrahima Thione, DirectorParaguay SerbiaCentro de Análisis y Difusión de Economia Paraguaya Foundation for the Advancement of Economics (FREN) (CADEP) Mihail Arandarenko, Chairman of the Board of DirectorsDionisio Borda, Research Member Katarina Bojie, Project CoordinatorFernando Masi, Director Bojan Ristic, ResearcherMaría Belén Servín, Research Member SingaporePeru Economic Development BoardCentro de Desarrollo Industrial (CDI), Sociedad Nacional Angeline Poh, Director Planning de Industrias Cheng Wai San, Head, Research & Statistics UnitNéstor Asto, Project DirectorLuis Tenorio, Executive Director Slovak Republic Business Alliance of Slovakia (PAS)Philippines Robert Kicina, Executive DirectorMakati Business Club (MBC)Marc P. Opulencia, Deputy Director SloveniaMichael B. Mundo, Chief Economist Institute for Economic ResearchPeter Angelo V. Perfecto, Executive Director Sonja Uršic, Senior Researcher Peter Stanovnik, ProfessorIn cooperation with the Management Association of the Philippines (MAP) University of Ljubljana, Faculty of EconomicsArnold P. Salvador, Executive Director Mateja Drnovšek, Professor Aleš Vahcic, ProfessorPolandEconomic Institute, National Bank of Poland South AfricaJarosław T. Jakubik, Deputy Director Business Leadership South AfricaPiotr Boguszewski, Advisor Friede Dowie, Director Michael Spicer, Chief Executive OfficerPortugal Business Unity South AfricaPROFORUM, Associação para o Desenvolvimento da Coenraad Bezuidenhout, Executive Director for Economic Engenharia PolicyIlídio António de Ayala Serôdio, Vice President of the Board Jerry Vilakazi, Chief Executive Officer of DirectorsFórum de Administradores de Empresas (FAE) SpainPaulo Bandeira, General Director IESE Business School, International Center forPedro do Carmo Costa, Member of the Board of Directors CompetitivenessEsmeralda Dourado, President of the Board of Directors María Luisa Blázquez, Research Associate Enrique de Diego, Research Assistant Antoni Subirà, Professor The Global Competitiveness Report 2011-2012 © 2011 World Economic Forum
  11. 11. Partner Institutes Sri Lanka Tunisia Institute of Policy Studies Institut Arabe des Chefs d’Entreprises Ayodya Galappattige, Research Officer Majdi Hassen, Executive Counsellor Saman Kelegama, Executive Director Chekib Nouira, President Dilani Hirimuthugodage, Research Officer Turkey Swaziland TUSIAD Sabanci University Competitiveness Forum Federation of Swaziland Employers and Chamber of Izak Atiyas, Director Commerce Selcuk Karaata, Vice Director Zodwa Mabuza, Chief Executive Officer Uganda Mduduzi Lokotfwako, Research Analyst Kabano Research and Development Centre Nyakwesi Motsa, Administration & Finance Manager Robert Apunyo, Program Manager Sweden Delius Asiimwe, Executive Director International University of Entrepreneurship and Technology Catherine Ssekimpi, Research Associate Niclas Adler, President Ukraine Switzerland CASE Ukraine, Center for Social and Economic Research University of St. Gallen, Executive School of Management, Dmytro Boyarchuk, Executive Director Technology and Law (ES-HSG) Vladimir Dubrovskiy, Leading Economist Beat Bechtold, Communications Manager United Arab Emirates Rubén Rodriguez Startz, Head of Project Abu Dhabi Department of Economic Development Syria H.E. Mohammed Omar Abdulla, Undersecretary Planning and International Cooperation Commission (PICC) Dubai Economic Council Amer Housni Loutfi, Head H.E. Hani Al Hamly, Secretary General Syrian Enterprise and Business Centre (SEBC) Emirates Competitiveness Council Noha Chuck, Chief Executive Officer H.E. Abdulla Nasser Lootah, Secretary General National Competitiveness Observatory (NCO) Institute for Social and Economic Research (ISER), Rami Zaatari, Team Leader Zayed University Taiwan, China Mouawiya Alawad, Director Council for Economic Planning and Development, Executive United Kingdom Yuan LSE Enterprise Ltd, London School of Economics and Liu, Y. Christina, Minister x Hung, J. B., Director, Economic Research Department Political Science Adam Austerfield, Director of Projects Shieh, Chung Chung, Researcher, Economic Research Niccolo Durazzi, Project Officer Department Robyn Klingler Vidra, Researcher Tajikistan Uruguay The Center for Sociological Research “Zerkalo” Universidad ORT Qahramon Baqoev, Director Isidoro Hodara, Professor Gulnora Beknazarova, Researcher Alikul Isoev, Sociologist and Economist Venezuela CONAPRI—Venezuelan Council for Investment Promotion Tanzania Eduardo Porcarelli, Executive Director Research on Poverty Alleviation (REPOA) Litsay Guerrero, Economic Affairs and Investor Services Manager Joseph Semboja, Professor and Executive Director Lucas Katera, Director, Commissioned Research Vietnam Cornel Jahari, Researcher, Commissioned Research Central Institute for Economic Management (CIEM) Department Dinh Van An, President Phan Thanh Ha, Deputy Director, Department of Thailand Macroeconomic Management Sasin Graduate Institute of Business Administration, Pham Hoang Ha, Senior Researcher, Department of Chulalongkorn University Macroeconomic Management Pongsak Hoontrakul, Senior Research Fellow Toemsakdi Krishnamra, Director of Sasin Institute for Development Studies in HCMC (HIDS) Piyachart Phiromswad, Faculty of Economics Nguyen Trong Hoa, Professor and President Du Phuoc Tan, Head of Department Thailand Development Research Institute (TDRI) Trieu Thanh Son, Researcher Somchai Jitsuchon, Research Director Chalongphob Sussangkarn, Distinguished Fellow Yemen Yos Vajragupta, Senior Researcher Yemeni Businessmen Club YBC Ahmed Abu Bakr Bazara, Chairman Timor-Leste Ali Saeed Mahmoud Al-Azaki, Executive Director East Timor Development Agency (ETDA) Margret Arning, Consultant Jose Barreto Goncalves, Survey Supervisor Januario Mok, Survey Field Officer Zambia Palmira Pires, Director Institute of Economic and Social Research (INESOR), University of Zambia Trinidad and Tobago Patricia Funjika, Research Fellow Arthur Lok Jack Graduate School of Business Jolly Kamwanga, Senior Research Fellow and Project Miguel Carillo, Executive Director Coordinator Harrylal Nirmala, Director, International Centre Mubiana Macwan’gi, Director and Professor The Competitiveness Company Zimbabwe Rolph Balgobin, Chairman Graduate School of Management, University of Zimbabwe A. M. Hawkins, Professor The Global Competitiveness Report 2011-2012 © 2011 World Economic Forum
  12. 12. Partner InstitutesBelize, Bolivia, Costa Rica, Dominican Republic, Ecuador,El Salvador, Honduras, Nicaragua, PanamaINCAE Business School, Latin American Center for Competitiveness and Sustainable Development (CLACDS)Arturo Condo, RectorLawrence Pratt, Director, CLACDSMarlene de Estrella, Director of External RelationsVíctor Umaña, Researcher and Project Manager, CLACDSLatvia, LithuaniaStockholm School of Economics in RigaKarlis Kreslins, Executive MBA Programme DirectorAnders Paalzow, Rector xi The Global Competitiveness Report 2011-2012 © 2011 World Economic Forum
  13. 13. The Global Competitiveness Report 2011-2012 © 2011 World Economic Forum
  14. 14. PrefacePrefaceKLAUS SCHWAB, Executive Chairman, World Economic ForumROBERT GREENHILL, Chief Business Officer, World Economic ForumThe Global Competitiveness Report 2011–2012 comes out “quality growth” in its various activities. In this context,amid multiple challenges to the global economy. After a the Forum’s Centre for Global Competitiveness andnumber of difficult years, a recovery from the economic Performance has begun to explore which factors arecrisis is tentatively emerging, although it has been very necessary to ensure that national competitivenessunequally distributed: much of the developing world is remains sustainable over the longer term. To this end,still seeing relatively strong growth, despite some risk of Chapter 1.2 of this Report presents our preliminaryoverheating, while most advanced economies continue thoughts on how to understand and measure qualityto experience sluggish recovery, persistent unemploy- growth through a competitiveness lens by definingment, and financial vulnerability, with no clear horizon sustainable competitiveness in economic, social, andfor improvement. In addition, rising commodity prices environmental terms. Issues of quality growth andare eroding the purchasing power of consumers and are sustainable competitiveness represent important areas forlikely to slow the pace of recovery. Such uncertainties the World Economic Forum’s research going forward.are being exacerbated by growing concerns about the This year’s Report features a record number of 142sustainability of public debt amidst the slow growth of economies, and thus continues to be the most com-some advanced economies. The damage that would be prehensive assessment of its kind. It contains a detailedwrought by the first sovereign defaults among advanced profile for each of the economies featured in the studyeconomies since the 1940s is impossible to gauge, as well as an extensive section of data tables with global xiiialthough the mere possibility of this eventuality has rankings covering over 100 indicators. This Reportalready hit investor confidence, put the very viability remains the flagship publication within the Forum’sof the euro into question, and further undermined the Centre for Global Competitiveness and Performance,US dollar’s value and its place as the world’s preferred which produces a number of research studies that mir-reserve currency. ror the increased integration and complexity of the Policymakers are struggling to find ways to manage world economy.the present economic challenges while preparing their The Global Competitiveness Report 2011–2012 couldeconomies to perform well in an increasingly complex not have been put together without the thought lead-global landscape. Given the extensive and necessary ership of Professor Xavier Sala-i-Martin at Columbiashort-term efforts related to addressing the most pressing University, who has provided ongoing intellectualfiscal concerns, it remains critical for countries to estab- support for our competitiveness research. We are alsolish the fundamentals underpinning economic growth grateful to the members of our Advisory Board onand development for the longer term. The World Competitiveness and Sustainability, who have providedEconomic Forum has, for more than three decades, their valuable time and knowledge to help us developplayed a facilitating role in this process by providing de- the preliminary framework on sustainability and com-tailed assessments of the productive potential of nations petitiveness presented in this Report: James Cameron,worldwide. The Report contributes to the understanding Founder and Vice-Chairman, Climate Change Capital;of the key factors determining economic growth, helps Dan Esty, Commissioner, Connecticut Departmentto explain why some countries are more successful than of Energy and Environmental Protection; Edwinothers in raising income levels and opportunities for J. Feulner Jr, President, The Heritage Foundation;their respective populations, and offers policymakers and Clément Gignac, Minister of Economic Development,business leaders an important tool in the formulation of Innovation and Export Trade of Quebec, Canada; Jeniimproved economic policies and institutional reforms. Klugman, Director, Gender and Development, World The complexity of today’s global economic Bank; Hans-Juergen Matern, Vice-President, Head ofenvironment has made it more important than ever to Strategic Quality Management, METRO GROUP;recognize and encourage the qualitative as well as the John McArthur, Chief Executive Officer and Executivequantitative aspects of growth, integrating such concepts Director, Millennium Promise; Kevin X. Murphy,as inclusiveness and environmental sustainability to President and Chief Executive Officer, J.E. Austinprovide a fuller picture of what is needed and what Associates; Mari Elka Pangestu, Minister of Tradeworks. Indeed, the Forum is focusing increasingly on of Indonesia; Luis Guillermo Plata, Chief Executive The Global Competitiveness Report 2011-2012 © 2011 World Economic Forum
  15. 15. Preface Officer, The Cornerstone Group; Mark Spelman, Global Head, Strategy, Accenture; and Simon Zadek, Senior Visiting Fellow, Global Green Growth Institute (GGGI). Appreciation also goes to Jennifer Blanke, Head of the Centre for Global Competitiveness and Performance, as well as competitiveness team mem- bers Beñat Bilbao-Osorio, Ciara Browne, Roberto Crotti, Margareta Drzeniek Hanouz, Thierry Geiger, and Satu Kauhanen. We thank FedEx and the Africa Commission, our partners in this Report, for their sup- port in this important publication. In addition, this Report would have not been possible without the com- mitment and enthusiasm of our network of over 150 Partner Institutes worldwide. The Partner Institutes are instrumental in carrying out the Executive Opinion Survey that provides the foundation data of this Report as well as imparting the results of the Report at the national level. Finally, we would like to convey our sincere gratitude to all the business executives around the world who took the time to participate in our Executive Opinion Survey.xiv The Global Competitiveness Report 2011-2012 © 2011 World Economic Forum
  16. 16. Part 1Measuring Competitiveness The Global Competitiveness Report 2011-2012 © 2011 World Economic Forum
  17. 17. The Global Competitiveness Report 2011-2012 © 2011 World Economic Forum
  18. 18. 1.1: The Global Competitiveness Index 2011–2012CHAPTER 1.1 The Global Competitiveness Report 2011–2012 is coming out at a time of re-emerging uncertainty in the globalThe Global Competitiveness economy. At the beginning of the year, worldwide recovery appeared fairly certain, with economic growthIndex 2011–2012: Setting for 2011 and 2012 projected by the International Monetary Fund (IMF) at 4.3 percent and 4.5 percent,the Foundations for Strong respectively. However, the middle of the year saw uncertainties regarding the future economic outlookProductivity re-emerge, as growth figures for many economies had to be adjusted downward and the political wrangling inXAVIER SALA-I-MARTIN the United States and Europe undermined confidenceBEÑAT BILBAO-OSORIO in the ability of governments to take the necessary stepsJENNIFER BLANKE to restore growth. Recent developments reinforce the observationMARGARETA DRZENIEK HANOUZ that economic growth is unequally distributed andTHIERRY GEIGER highlight the shift of balance of economic activity. OnWorld Economic Forum the one hand, emerging markets and developing econo- mies, particularly in Asia, have seen relatively strong economic growth—estimated at 6.6 and 6.4 percent for 2011 and 2012, respectively, and attracting increasing financial flows. On the other hand, the United States, Japan, and Europe are experiencing slow and deceler- ating growth with persistent high unemployment and continued financial vulnerability, particularly in some European economies. GDP growth rates for advanced economies in 2011 are expected to remain at levels that, 3 for most countries, are not strong enough to reduce the unemployment built up during the recession. In this context, policymakers across all regions are facing difficult economic management challenges. After closing the output gap and reducing the excess capacity generated during the crisis, emerging and developing countries are benefitting from buoyant internal demand, although they are now facing inflationary pressures caused by rising commodity prices. In advanced economies, the devastating earthquake in Japan and doubts about the sustainability of public debt in Europe, the United States, and Japan—issues that could further burden the still-fragile banking sectors in these countries—are undermining investor and business confidence and casting a shadow of uncertainty over the short-term economic outlook. Particularly worrisome is the situ- ation in some peripheral economies of the euro zone, where—in spite of the adoption of recovery plans— high public deficit and debt levels, coupled with anemic growth, have led to an increased vulnerability of the economy and much distress in financial markets, as fears of default continue to spread. This complex situation in turn encumbers the fiscal consolidation that will reduce debt burdens to the more manageable levels necessary to support longer-term economic performance. Meeting the economic policy challenges resulting from this two-speed recovery requires not losing sight of long-term competitiveness fundamentals amid nu- merous short-term political pressures in industrialized and emerging economies alike. Many of the current difficulties experienced by advanced economies, notably The Global Competitiveness Report 2011-2012 © 2011 World Economic Forum
  19. 19. 1.1: The Global Competitiveness Index 2011–2012 in the peripheral euro zone, are closely related to training, technological progress, macroeconomic stabil- modest competitiveness performances that limit long- ity, good governance, firm sophistication, and market term productivity growth. Efforts to stabilize fiscal efficiency, among others. While all of these factors are positions and reduce debt burdens must therefore be likely to be important for competitiveness and growth, complemented by competitiveness-enhancing reforms they are not mutually exclusive—two or more of them aimed at improving the potential for growth in the can be significant at the same time, and in fact that is medium-to-longer run. In emerging markets, high what has been shown in the economic literature.3 growth rates provide a propitious environment for This open-endedness is captured within the GCI by enhancing competitiveness through structural reforms including a weighted average of many different compo- and growth-enhancing investments in order to make nents, each measuring a different aspect of competitive- economic development more sustainable. Competitive ness. These components are grouped into 12 pillars of economies have in place elements driving the produc- competitiveness: tivity enhancements that support high incomes and that, at the same time, ensure that the mechanisms enabling First pillar: Institutions solid economic performance going into the future are in The institutional environment is determined by the legal position. and administrative framework within which individuals, For more than three decades, the World Economic firms, and governments interact to generate wealth. The Forum’s annual Global Competitiveness Reports have stud- importance of a sound and fair institutional environ- ied and benchmarked the many factors underpinning ment became even more apparent during the economic national competitiveness. From the onset, the goal has crisis and is especially important for solidifying the fragile been to provide insight and stimulate discussion among recovery given the increasing role played by the state at all stakeholders on the best strategies and policies to the international level and for the economies of many overcome the obstacles to improved competitiveness. countries. In the current challenging economic environment, our The quality of institutions has a strong bearing on work is a critical reminder of the importance of taking competitiveness and growth.4 It influences investment 4 into account the consequences of our present actions on decisions and the organization of production and plays future prosperity based on sustained growth. a key role in the ways in which societies distribute the Since 2005, the World Economic Forum has based its benefits and bear the costs of development strategies competitiveness analysis on the Global Competitiveness and policies. For example, owners of land, corporate Index (GCI), a comprehensive tool that measures the shares, or intellectual property are unwilling to invest in microeconomic and macroeconomic foundations of the improvement and upkeep of their property if their national competitiveness.1 rights as owners are not protected.5 We define competitiveness as the set of institutions, The role of institutions goes beyond the legal policies, and factors that determine the level of productivity of a framework. Government attitudes toward markets and country. The level of productivity, in turn, sets the level freedoms and the efficiency of its operations are also of prosperity that can be earned by an economy. The very important: excessive bureaucracy and red tape,6 productivity level also determines the rates of return overregulation, corruption, dishonesty in dealing with obtained by investments in an economy, which in turn public contracts, lack of transparency and trustworthi- are the fundamental drivers of its growth rates. In other ness, and political dependence of the judicial system words, a more competitive economy is one that is likely impose significant economic costs to businesses and to grow faster over time. slow the process of economic development. The concept of competitiveness thus involves static In addition, the proper management of public and dynamic components: although the productivity of finances is also critical to ensuring trust in the national a country determines its ability to sustain a high level of business environment. Indicators capturing the qual- income, it is also one of the central determinants of its ity of government management of public finances are returns to investment, which is one of the key factors therefore included here to complement the measures of explaining an economy’s growth potential. macroeconomic stability captured in pillar 3 below. Although the economic literature has focused The 12 pillars of competitiveness mainly on public institutions, private institutions are also There are many determinants driving productivity and an important element in the process of creating wealth. competitiveness. Understanding the factors behind this The recent global financial crisis, along with numerous process has occupied the minds of economists for hun- corporate scandals, have highlighted the relevance of dreds of years, engendering theories ranging from Adam accounting and reporting standards and transparency for Smith’s focus on specialization and the division of labor preventing fraud and mismanagement, ensuring good to neoclassical economists’ emphasis on investment in governance, and maintaining investor and consumer physical capital and infrastructure,2 and, more recently, confidence. An economy is well served by businesses to interest in other mechanisms such as education and that are run honestly, where managers abide by strong The Global Competitiveness Report 2011-2012 © 2011 World Economic Forum
  20. 20. 1.1: The Global Competitiveness Index 2011–2012ethical practices in their dealings with the government, indebtedness on competitiveness, a topic of particularother firms, and the public at large.7 Private-sector relevance given the growing concerns about the poten-transparency is indispensable to business, and can be tial sovereign defaults in Europe, Japan, and the Unitedbrought about through the use of standards as well as States, which, if not prevented, could endanger the still-auditing and accounting practices that ensure access to fragile recovery worldwide.information in a timely manner.8 It is important to note that this pillar evaluates the stability of the macroeconomic environment, so it doesSecond pillar: Infrastructure not directly take into account the way in which publicExtensive and efficient infrastructure is critical for en- accounts are managed by the government. This quali-suring the effective functioning of the economy, as it tative dimension is captured in the institutions pillaris an important factor determining the location of eco- described above.nomic activity and the kinds of activities or sectors thatcan develop in a particular instance. Well-developed Fourth pillar: Health and primary educationinfrastructure reduces the effect of distance between re- A healthy workforce is vital to a country’s competi-gions, integrating the national market and connecting it tiveness and productivity. Workers who are ill cannotat low cost to markets in other countries and regions. In function to their potential and will be less productive.addition, the quality and extensiveness of infrastructure Poor health leads to significant costs to business, as sicknetworks significantly impact economic growth and workers are often absent or operate at lower levels ofreduce income inequalities and poverty in a variety of efficiency. Investment in the provision of health servicesways.9 A well-developed transport and communications is thus critical for clear economic, as well as moral,infrastructure network is a prerequisite for the access of considerations.11less-developed communities to core economic activities In addition to health, this pillar takes into accountand services. the quantity and quality of the basic education received Effective modes of transport, including quality by the population, which is increasingly important inroads, railroads, ports, and air transport, enable entre- today’s economy. Basic education increases the effi-preneurs to get their goods and services to market in a ciency of each individual worker. Moreover, workers 5secure and timely manner and facilitate the movement who have received little formal education can carry outof workers to the most suitable jobs. Economies also only simple manual tasks and find it much more dif- difdepend on electricity supplies that are free of interrup- ficult to adapt to more advanced production processestions and shortages so that businesses and factories can and techniques. Lack of basic education can thereforework unimpeded. Finally, a solid and extensive tele- become a constraint on business development, withcommunications network allows for a rapid and free firms finding it difficult to move up the value chainflow of information, which increases overall economic by producing more sophisticated or value-intensiveefficiency by helping to ensure that businesses can com- products.municate and decisions are made by economic actors For the longer term, it will be essential to avoidtaking into account all available relevant information. significant reductions in resource allocation to these critical areas, in spite of the fact that many governmentThird pillar: Macroeconomic environment budgets will need to be cut to reduce the fiscal burdenThe stability of the macroeconomic environment is built up over the past years.important for business and, therefore, is important forthe overall competitiveness of a country.10 Although Fifth pillar: Higher education and trainingit is certainly true that macroeconomic stability alone Quality higher education and training is crucial forcannot increase the productivity of a nation, it is also economies that want to move up the value chainrecognized that macroeconomic disarray harms the beyond simple production processes and products.12 Ineconomy, as we have seen recently. The government particular, today’s globalizing economy requires coun-cannot provide services efficiently if it has to make tries to nurture pools of well-educated workers who arehigh-interest payments on its past debts. Running fiscal able to adapt rapidly to their changing environment anddeficits limits the government’s future ability to react to the evolving needs of the production system. This pillarbusiness cycles. Firms cannot operate efficiently when measures secondary and tertiary enrollment rates as wellinflation rates are out of hand. In sum, the economy as the quality of education as evaluated by the businesscannot grow in a sustainable manner unless the macro community. The extent of staff training is also takenenvironment is stable. Macroeconomic stability has into consideration because of the importance of voca-captured the attention of the public most recently when tional and continuous on-the-job training—which issome European countries needed the support of the neglected in many economies—for ensuring a constantIMF and other euro zone countries to prevent sover- upgrading of workers’ skills.eign default, as their public debt reached unsustainablelevels. Box 1 discusses the potential impact of high The Global Competitiveness Report 2011-2012 © 2011 World Economic Forum