Margareta Hanouz

7/28/2019 Margareta Hanouz

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Competitiveness of Central

Asia

Findings from the Central AsianCompetitiveness Outlook

Margareta Drzeniek Hanouz

Director, Senior Economist

Centre for Global Competitiveness and PerformanceWorld Economic Forum

Astana Economic Forum, Astana, 4 May 2011


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Center For Global Competitiveness and

Performance

Launched in 1979 covering 16 countries

Most recently covering 139 countries

Flagship product: The Global Competitiveness Report

Other special topic and regional reports:

The Global Enabling Trade Report 2010-2011

The Travel & Tourism Competitiveness Report 2011

The Global Information Technology Report 2010-2011 (to be released in April 2011)

The Africa Competitiveness Report 2011 (to be released in May 2011)

The Russia Competitiveness Report (to be released in June 2011)

The Indonesia Competitiveness Review 2011 (to be released June 2011)


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Global Competitiveness Report

Key Features

Enables for cross country comparison of 139 economiesProduced in collaboration with leading academics and research institutes worldwide

Includes comprehensive dataset on competitiveness.

A) The Executive Opinion Survey:

B) Other data available from international sources and data partners:

Data sources are:

Qualitative data capturing the perspectives of business leaders around the world

Respondents ccompare their national operating environment with international standards

on a wide range of dimensions.

Quantitative measures comparable across countries. Some of the international sources

used are the World Bank, the International Monetary Fund, UNESCO, ITU.


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What we try to measure:

Different growth paths

0

5,000

10,000

15,000

20,000

25,000

30,000

GDPpercapita(PP

P)

GDP per capita (PPP) - evolution over the past 30 years

China Korea Nigeria


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Definition of competitiveness

How we define competitiveness:

The set of institutions, policies,

and factors that determine the level

of productivity of a countryThe level of productivity, in turn,sets the sustainable level of

prosperity that can be earned by aneconomy.


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The Global Competitiveness IndexThe 12 pillars of competitiveness

Key for

efficiency-driveneconomies

Key for

factor-driveneconomies

1. Institutions

2. Infrastructure

3. Macroeconomic stability

4. Health and primary education

5. Higher education and training

6. Goods market efficiency

7. Labor market efficiency

8. Financial market sophistication

9. Technological Readiness10. Market size

11. Business sophistication

12. Innovation

Key for

innovation-driven

economies

BASIC REQUIREMENTS

EFFICIENCY ENHANCERS

INNOVATION & SOPHISTICATION FACTORS


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SEE countries are spread across almost

the entire ranking

EconomyRank outof 139

Score(1 to7) Economy

Rank outof 139

Score(1 to7)

Switzerland 1 5.6 Korea, Rep. 22 4.9

Sweden 2 5.6 China 27 4.8

Singapore 3 5.5 Ireland 29 4.7

United States 4 5.4 Estonia 33 4.6

Germany 5 5.4 Czech Republic 36 4.6

Japan 6 5.4 Poland 39 4.5Finland 7 5.4 India 51 4.3

Netherlands 8 5.3 Brazil 58 4.3

Denmark 9 5.3 Turkey 61 4.2

Canada 10 5.3 Russian Federation 63 4.2

Hong Kong SAR 11 5.3 Bulgaria 71 4.1

United Kingdom 12 5.3 Kazakhstan 72 4.1

Taiwan, China 13 5.2 Ukraine 89 3.9

Norway 14 5.1 Armenia 98 3.8

France 15 5.1 Mongolia 99 3.7

Australia 16 5.1 Tajikistan 116 3.5

Qatar 17 5.1 Kyrgyz Republic 121 3.5

Austria 18 5.1 Venezuela 122 3.5

Belgium 19 5.1Luxembourg 20 5.0


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Mixed record over the past five years

Kazakh

stan

Mong

olia

Tajikist

an

Kyrgyz

Repu

blic

72 99 116 121

High 1

23

4

5

6

7

8

9

Low 10

Decile rank

GCI 2010-2011

GCI 2005-2006 or edition of earliest inclusion

No change in decile ranking

GCI 2010-2011 rank >

Decilerank


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2.00

3.00

4.00

5.00

6.00

7.00

1st pillar: Institutions

2nd pillar: Infrastructure

3rd pillar: Macroeconomic

environment

4th pillar: Health and

primary education

5th pillar: Higher education

and training

6th pillar: Goods market

efficiency

7th pillar: Labor market

efficiency

8th pillar: Financial market

development

9th pillar: Technological

readiness

10th pillar: Market size

11th pillar: Business

sophistication

12th pillar: Innovation

EU 27 OECD Transition Economies Central Asia

On average, CA competitiveness lags behind the EU with

institutions, infrastructure and education as particular

challenges


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The performance of most countries in the region is

remarkably similar across all the dimensions

4.6

4.94.9

5.6

6.3

5.3

4.7

4.9

4.7

4.9

5.7

4.4

3.7

3.5

3.0

2.5

3.2

5.2

3.4

3.5 3.6

3.12.7

2.1

3.0

2.1

1

4

7

OverallGCI

2010-2011

Institutions

Infrastructure

Macroeconomic

environment

H

ealthand

prim

aryeducation

Hig

hereducation

andtraining

Goodsmarket

efficiency

Labormarket

efficiency

Fin

ancialmarket

d

evelopment

Technological

readiness

Marketsize

Business

sophistication

Innovation

Score (1-7)Best/Worst

Perfo rmer TE

Azerbaijan

Ukraine

Georgia

Moldova

Armenia

TransitionEconomies Average


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Biggest challenge: reform of public and private

institutions

0.00

1.00

2.00

3.00

4.00

5.00

6.00

A. Public institutions

1. Property rights

2. Ethics and

corruption

3. Undue influence

4. Government

inefficiency

5. Security

EU 27 OECD Transition economies Central Asia


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Infrastructure for transport and electricity is

underdeveloped compared to other transition economies

1 2 3 4 5 6 7

Quality of overall infrastructure

Quality of roads

Quality of railroad infrastructure

Quality of port infrastructure

Quality of air transport infrastructure

Quality of electricity supply

Central Asia Transition economies OECD EU 27


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Participation in education is high, but quality is low and ill

adapted to the needs of business

2.00

3.00

4.00

5.00

6.00

5th pillar: Higher

education andtraining

A. Quantity of

education

B. Quality of

education

C. On-the-job training

EU 27 OECD Transition economies Central Asia


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Goods markets are not efficient mainly due to a high extent

of market dominance

4.15

2.953.24 3.42

3.91 3.98 3.90

3.35

1.00

2.00

3.00

4.00

5.00

6.00



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Financial markets have suffered during the financial

crisis, and access to finance remains a major bottleneck

1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 5.50 6.00

Availability of financial services

Affordability of financial services

Financing through local equity market

Ease of access to loans

Venture capital availability

Soundness of banks



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Key messages

Countries show very similar competitiveness performance

Efficient labour markets are key advantages, in some countries

macroeconomic stability is high

Disadvantages are related to infrastructure, institutions, quality ofeducation, market efficiency, and financial markets

Addressing challenges related to institutions is key and will require

above all strong political will, but could impact on investment and

growth quickly.


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Margareta Hanouz