Wednesday, September 9, 2009

India Ranks 49th in Economic Competiveness by the World Economic Forum

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Being from India I am always interested to know where India stands today vis a vis rest of the world.

I was quite shocked and dismayed that India although being considered the second most progressive economies of the world next to its giant neighbour China is nowhere close to any of the most developed countries of the world as far as competitiveness in economy is concerned.

Even Singapore a tiny country in comparison to India's size and population is well placed after USA, ranked third in the merit of economic competiveness.

No wonder India has many miles to go and have to move faster to catch up to find a place amongst the top ten most economically and technologically developed countries of the world.

In a recent worldwide report prepared by the World Economic Forum (WEF) India managed a poor 49th position a notch better than Jordan, amongst the 133 countries whose competiveness level has been measured after taking into several parameters.

According to the report Switzerland has beaten USA to the second position to take the leading position as the most competitive economy of the world today.


The Top 50 Competitive Economies in the world




Rank

Score

Switzerland

1

5.60

2

United States

2

5.59

1

Singapore

3

5.55

5

Sweden

4

5.51

4

Denmark

5

5.46

3

Finland

6

5.43

6

Germany

7

5.37

7

Japan

8

5.37

9

Canada

9

5.33

10

Netherlands

10

5.32

8

Hong Kong SAR

11

5.22

11

Taiwan, China

12

5.20

17

United Kingdom

13

5.19

12

Norway

14

5.17

15

Australia

15

5.15

18

France

16

5.13

16

Austria

17

5.13

14

Belgium

18

5.09

19

Korea, Rep.

19

5.00

13

New Zealand

20

4.98

24

Luxembourg

21

4.96

25

Qatar

22

4.95

26

United Arab Emirates

23

4.92

31

Malaysia

24

4.87

21

Ireland

25

4.84

22

Iceland

26

4.80

20

Israel

27

4.80

23

Saudi Arabia

28

4.75

27

China

29

4.74

30

Chile

30

4.70

28

Czech Republic

31

4.67

33

Brunei Darussalam

32

4.64

39

Spain

33

4.59

29

Cyprus

34

4.57

40

Estonia

35

4.56

32

Thailand

36

4.56

34

Slovenia

37

4.55

42

Bahrain

38

4.54

37

Kuwait

39

4.53

35

Tunisia

40

4.50

36

Oman

41

4.49

38

Puerto Rico

42

4.48

41

Portugal

43

4.40

43

Barbados

44

4.35

47

South Africa

45

4.34

45

Poland

46

4.33

53

Slovak Republic

47

4.31

46

Italy

48

4.31

49

India

49

4.30

50

Jordan

50

4.30

48

Here are some of the highlights of the report:

India Specific Key indicators

  • Population (millions), 2008…………………………….1,186.2

  • GDP (US$ billions), 2008……………………………….1,209.7

  • GDP per capita (US$), 2008 …………………………..1,016.2

  • GDP (PPP) as share (%) of world total, 2008 …..…….4.77


The most problematic factors for doing business in India

problems doing business in india


A single glance at the chart above gives a clear picture for diagnosis of the many problems that is holding back the country from moving swiftly ahead.

If we scrutinize the picture closely, its evident that poor infrastructure and a very inefficient government bureaucracy are acting as drags and holding back the country from zipping on the fast lane along the highway to economic development and prowess.


India Competitiveness Index



However there are few things to cheer about. India ranks fourth as far as market size is concerned.This is good news for foreign investors and entrepreneurs who would like to set up industry for which they have a sizeable potential market with purchasing power.

However if we look at chart below we find that in spite of a large middle class market within India which is larger than the total population of Europe, a good 42 percent of India's population lives on less than $1.25 a day.

This is a great shame for all Indians particularly the well to do urbanites who are more prone to be anglophiles and suppose to be progressive.


GDP per Capita

Indian GDP per Capita



However there are few silver linings for India too and for which Indians are being envied the world over today. India has been ranked 30th and 27th as far as innovation and business sophistication are concerned respectively. This is something that Indians need to concentrate more to make it their forte to bypass the problems and grab the top most positions.

It ranks an outstanding 28th in the most complex areas measured by the business sophistication and innovation subindex, ahead of several advanced economies.

India also boasts fairly well functioning institutions (54th), bustling financial markets (16th), and a sound banking sector (25th)

However, India ranks very poorly on some of the basic determinants of competitiveness, namely health and primary education (101st), macroeconomic stability (96th) and infrastructure (76th).

The biggest surprise to me however was the penetration rates of Mobile Telephony – India is ranked at 116th out of 133 countries, so much for being 2nd largest mobile phone market !

Penetration of Internet and personal computers are also one of the lowest with a ranking of 104th and 96th respectively.

Take that for Indian competitiveness !

You can download full 492 page report for all countries from here.

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