News: India breaks BRIC ranks in competitiveness

(BS 27/09/2006) New Delhi - Ever since Goldman Sachs came out with its much-talked-about report saying Brazil, Russia, India and China will dominate the world’s economy by 2040, India has often found itself clubbed with the other three.

However, the World Economic Forum’s Global Competitiveness Index (GCI) gives India the chance to break out.

The rankings for 2006-07 place it 43rd, well ahead of Brazil (66), China (54) and Russia (62). Even last year, India, in 45th place, was ahead of the other three.

In fact, each of the other three slipped this year: China from the 48th place to 54th, Brazil from the 57th to 66th and Russia from the 53rd to 62nd.

Switzerland, Finland and Sweden are the world’s most competitive economies, according to the report.

Denmark, Singapore, the US, Japan, Germany, the Netherlands and the UK complete the top 10, but the US shows the most pronounced drop, falling from first to sixth place.

As in previous years, India continues to score well in indicators related to innovation as well as in the adoption of technologies from abroad.

However, a number of weaknesses remain. Efforts to reduce the high fiscal deficit — one of the highest in the world — need to be sustained, and, as in previous years, the lack of appropriate infrastructure impedes growth in more remote regions of the country.

Dealing with shortcomings in the provision of health services and education will ensure that the benefits of economic growth are more broadly distributed, the report says.

“The quality of the business environment in India has improved tangibly in recent years... The available evidence suggests that the Indian economy may have entered a high growth plateau — the challenge for the authorities will be to ensure that this process is sustained and that it precipitates further progress in poverty reduction,” said Augusto Lopez-Claros, Chief Economist and head of the World Economic Forum’s Global Competitiveness Network, in a press release.

The rankings are drawn from a combination of publicly available hard data and the results of the Executive Opinion Survey, a comprehensive annual survey conducted by the World Economic Forum, together with its network of partner institutes (research institutes and business organisations) in the countries covered by the report.

This year, over 11,000 business leaders were polled in a record 125 economies worldwide. The survey questionnaire is designed to capture a broad range of factors affecting an economy’s business climate that are critical determinants of sustained economic growth.

The forum annually delivers a comprehensive overview of the main strengths and weaknesses in a large number of countries, making it possible to identify key areas for policy formulation and reform.