RI moves up on list of competitive nations

RI moves up on list of competitive nations

Associated Press, Lausanne, Switzerland

Indonesia inched up to the 47th spot this year from the 49th position in 2001 on the list of the world's most competitive nations, which is published by the Switzerland-based International Institute for Management Development.

The country ranked 44th in 2000.

The United States remains the world's most competitive nation in 2002, but other high fliers like Singapore and Hong Kong have lost ground in the turbulent economic environment, according to the institute's annual survey released on Tuesday.

Japan, which at one time headed the list for eight straight years, fell to 30th place, while struggling Argentina dropped to the bottom of the 49 countries covered in the poll of business leaders.

The survey said 2001 was "a year to forget" in terms of competitiveness, and predicted only a bumpy road toward improvement in 2002.

"The economy rapidly lost steam and the stock market plunged, dragged down by the technology sector. The dramatic events of Sept. 11 accentuated the correction," the report said.

"The economy will remain highly volatile, especially in Asia."

Finland, Luxembourg and the Netherlands each moved up one place to second, third and fourth, respectively, while Singapore dropped from second to fifth on the list.

Switzerland's stable economy allowed it to move from 10th on the list to seventh, and Canada picked up one place to move to eighth. Hong Kong, the largest growing economy in 2000, and Ireland, each dropped three places to ninth and 10th, respectively.

The United States, which has topped the survey every year since 1994, was ranked first for business efficiency, direct investment flow and use of computers.

However, it came bottom of the 49 countries for its US$413.6 billion current account deficit and for its exports of goods as a percentage of gross domestic product. Other areas where it ranked low included cost of living, industrial disputes, alcohol and drug abuse and youth unemployment.

The survey found that the scandal surrounding the collapse of energy trader Enron Inc. and other high-profile bankruptcies had eroded public confidence in corporate figures.

"A far-reaching overhaul of accounting and auditing practices may be the price to pay for renewed business confidence," the survey said.

Japan, the world's second-largest economy, is suffering a "midlife crisis" that is longer and deeper than expected, the report said.

"Consequently, it will not contribute to a recovery in the world economy to the same extent as in the past. The successful introduction of the euro will also challenge the yen's position as an alternative to the dollar."

Overall, the report said, despite the economic slowdown and increased market consolidation in 2002, "the continuous growth in the size of world markets remains the most fundamental long-term factor affecting world competitiveness".

"The opening of world markets, despite present trade tensions, has provided access to huge potential markets, especially in emerging countries," it added.

Rankings in the World Competitiveness Survey:

Country 2001 2000

1. United States 1 1 2. Finland 3 4 3. Luxembourg 4 6 4. Netherlands 5 3 5. Singapore 2 2 6. Denmark 15 13 7. Switzerland 10 7 8. Canada 9 8 9. Hong Kong 6 12 10. Ireland 7 5 14. Australia 11 10 24. Taiwan 18 20 26. Malaysia 29 27 27. South Korea 28 28 30. Japan 26 24 31. China 33 30 34. Thailand 38 35 40. Philippines 40 37 47. Indonesia 49 44