GCI of Caribbean

8/8/2019 GCI of Caribbean

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Global Competitive Index

Of The Caribbean

(West Indies)

Submitted By:

Abhishek Dey

MBA (IB) Section: A

Reg. No: 1226110103


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NATURE OF COMPETITIVENESS

Competitiveness can be examined at 3 levels:

Enterprise/firm : the ability to produce/market products of superior quality and lower costs than those offered by domestic/international producers

Sector/industry : the extent to which the sector/industry offers potential for growth and to attract a good return on investment

National/country : the extent to which the business environment isconducive to growth/development thus enhancing the capacity of the economy to improve the standard of living on a sustainablebasis.

Competitiveness refers to the ability of the enterprise, industry,country to produce and sell goods and services in domestic/foreignmarkets at prices and with the quality that ensure long-runviability and sustainability.


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Several measures of competitiveness (at the international level):

Export market share, export growth, profitability

Cost competitiveness, productivity, technology indicators, pricecompetitiveness, access to resources, quality competitiveness.

Real effective exchange rate, growth rate of per capita income,composite indices.

The Global Competitiveness Index/Report focuses mainly onnational competitiveness using a set of composite indices. Thereis concern with the issues of dynamic comparative advantageand technological dynamism.

The Report looks at the main factors influencing national competitiveness quality of the macro-environment, the quality of

public institutions and technology/innovation-a greater emphasisis placed on the micro issues of competitiveness.


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The Competitiveness of countries is based on 12 pillars

B asic Requirements

Institutions Infrastructure

Macroeconomic stability

Health and primary education

Efficiency Enhancers

Higher education and training

Goods market efficiency

Labor market efficiency

Financial market sophistication

Technology readiness

Market size

Innovation & Sophistication

Business sophistication

Innovation


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These pillars are used to rank the relative competitiveness of countries. Qualitative information ( Executive Opinion Surveys) isused to supplement quantitative information on a country s

competitiveness.

Competitiveness is a means to an end

Benefits include increased exports, output growth, income,employment, economic welfare/standard and quality of life.

Productivity enhancement along with the pillars above are critical to improved competitiveness.

The World Economic Forum (WEF) considers competitiveness as a set of factors, policies and institutions which determine the level of productivity

of a country . Usually we see productivity growth asreducing unit costs of production thus leading to

improved competitiveness.

Global Competitiveness Index

(Caribbean Results)

Stage approach to Development underlies the Report:


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Guyana factor driven stage of development (2009)

Jamaica transition from factor to efficiency stage

(2009)-a regression from previous years

B arbados transition from efficiency to innovation stage of development (2009)

Trinidad and Tobago innovation stage of development (2009) advance from previous

GLOBAL COMPETITIVENESS INDEX- RANKING

Country 2007/07 2007/08 2008/09 2009/10

BARBADOS 41 50 47 44

JAMAICA 67 78 86 91

TRINIDAD &TOBAGO

76 84 92 88

SURINAME 104 113 103 102

GUYANA 113 126 115 104


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Source: World Economic Forum

U NIDO s Competitive Industrial Performance Index - Ranking

COU NTRY 1993 1998 2003 2005Barbados 57 51 50 59

Jamaica 68 74 77 77 St. Lucia 82 107 88 -Trinidad &Tobago

50 40 52 78

Source: UNIDO Website

Barbados has been in the top 50 of the countries in 6 pillars(2006/7 and 2009/10)

Institutions

Infrastructure

Health/primary education

Higher education and training

Technological readiness

Innovation


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Trinidad &Tobago has been in the top 50 of all countries in one pillar macroeconomic stability (2006/7 and 2009/10) with financial market sophistication added in 2009/10.

All the Caribbean countries were ranked over 100 for market size reflection their small domestic market sizes critical natureof trade and trading agreements for the region.

Business sophistication and innovation were also poorly

performing pillars for the region, along with labour and goodsmarket efficiency.

In terms of the Index of Economic Freedom (2009), Barbadoswas the top country in the region with a global ranking of 22.

Trinidad and Tobago was fourth with a global ranking of 41 Trinidad and Tobago ranked lowly in terms of the Ease of

Doing Business in 2008 and 2009

T&T performed better than Barbados in terms of the Degree of Globalization in 2008

There is a relatively high cost of starting a business in Barbados


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Index of Economic FreedomCountry Score RankingBarbados 71.5 22The Bahamas 70.3 27 St. Lucia 68.8 39Trinidad & Tobago 68.0 41

Jamaica 65.2 52St. Vincent 64.3 60Belize 63.0 66Suriname 54.1 125

Ranking based on Ease of Doing BusinessCountry 2008 2009

Antigua & Barbuda 41 42Trinidad & Tobago 67 80Belize 59 78Dominica 77 74Grenada 70 84Guyana 104 105

Jamaica 63 63St. Kitts & Nevis 64 67 St. Lucia 34 34St. Vincent 54 66Suriname 142 146Source: World Bank: Doing Business in Small Developing States, 2008, 2009


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Conclusion:Main factors to consider which have a bearing on country

competitiveness are: Investment in education/training and health (i.e., the human

capital of the country) universal secondary level education; freeeducation to tertiary level; training in TVET; polyclinic system;drug service, etc. Challenges still remain in relation to the new economy re; the quality and quantity of the output of secondary

and post secondary system.

Good governance and administration smooth transitions inadministration of government, well qualified civil servants, littledifference in political ideology, regular legislative reporting. Somereform and strengthening is need to reduce transactions costs.

Social stability relatively low incidence of crime, active NGOs,vibrant call-in programs, free press, no serious racial/ethnic divide.Need to address erosion of social capital.

Social partnership Government, labor unions and privatesector since early 1990s Productivity Council, Protocols, regular consultations and meetings. Need to widen and strengthen the

Partnership.Relatively small informal sector compared with other Caribbeancountries suggesting a less restrictive business environment. Need to foster entrepreneurial activity and innovation for exports.


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General macroeconomic stability fixed exchange rate withUSA since mid 1970s, free flow of economic data, sound choice of economic policies, financial services

Reliance on remittances, financial services and tourism tosupplement other areas of production. Greater use of the Diasporais needed: Skills, Markets, Investment, Remittances,Lobbying/Advocacy

Generally well-functioning institutions legal, economic, social

and political and infrastructure telecoms, electricity, water,roads, ports etc. Need for Greater efficiency and lower costs

Consistent Development planning over the years visioning,targeting, monitoring etc unlike other countries. A National Planning Agency should be considered

Documents

GCI of Caribbean