Hong Kong and Singapore still 'most competitive'

GENEVA (AFP): Singapore and Hong Kong remain the world's most competitive economies whose strengths -- ranging from infrastructure to education -- are virtual "recipes" for growth, says a new report issued here Wednesday.

The duo excel in nearly every major area that counts in terms of competitiveness, with institutions and policies in place that promote long-term growth, says the Global Competitiveness Report 1997, compiled by the World Economic Forum, a private foundation.

Indonesia was the most competitive among big emerging markets, winning the 15th slot from 30th.

The United States, the world's largest economy, came in third, followed by Canada, New Zealand and Switzerland.

Four Asian nations rank among the top 10 in the survey with Taiwan and Malaysia at eight and ninth places respectively.

However, the report, which surveys 53 nations, said that a "modest slowdown" was underway for the Asian Tigers. "Growth remains high by international standards, but the super-fast rates may be a thing of the past. "

Thailand, which faces a large current account deficit and pressure on its currency, dropped four places to 18th and the Philippines three to 34th place.

Among the big emerging markets Indonesia was the most competitive, leaping to 15th place this year from 30th.

China, the world's fastest growing economy, moved up to 29th position this year from 36th.

"The economic reforms now underway in these two 'Goliath' countries and in India and Brazil are the most important current global economic phenomena," says the report.

Competitiveness, defined as the ability of a country to achieve high rates of per capita gross domestic product growth, was judged on the basis of eight elements:

High achievers in Europe, according to the report, include the United Kingdom, which made it to seventh place this year up from 15th, Norway, in 10th place, and the Netherlands, 12th in the rankings from 17th.

The laggards, bound by rigid labor markets and an extensive social welfare state include France, stuck in 23rd spot, Germany, slipping two places to 25th and Italy at 39th.

"Until the painful but essential reforms are met, these countries will continue to suffer from sluggish output growth and excessively high rates of unemployment, the report says.

The survey ranked the United States the most competitive among large economies (populations over 10 million), saying it was the undisputed leader in technology and management. The country also scored high for its labor flexibility, technological prowess and low fiscal deficit -- 1.4 percent in 1996, the industrial world's lowest, according to the survey.

A survey on competitiveness compiled by the International Institute for Management Development in Lausanne -- which has issued such rankings for a decade -- gave the United States top competitive billing.

The results of IMD's exercise, in which Singapore and Hong Kong ranked second and third respectively, were published May 17.