WEF_Augusto_Lopez_Claros

Slide 1: 

1

Slide 2: 

2 Contents Part I. Global Competitiveness Programme What are we trying to achieve? The Global Competitiveness Report Results and analysis Part II. Hungary: Results from 2003-2004

Slide 3: 

3 Part I. Global Competitiveness Programme: What are we trying to achieve?

Slide 4: 

4 Part I. Global Competitiveness Programme: What are we trying to achieve?

Slide 5: 

5 What are we trying to achieve? We would like to cast some light on the factors that help explain these differences and their relative importance. Why is it that South Korea and Ghana’s GDP per capita have diverged to such an extent in the last 4 decades? What factors are crucial to enhancing the capacity of an economy to achieve sustained growth over the medium term, controlling for the current level of development ? Why is it that oil-rich Nigeria lags far behind the city-state of Singapore? The Growth Competitiveness Index (GCI) attempts to identify robust indicators of the health of a nation’s economy and its ability to grow on a sustained basis.

Slide 6: 

6 Evaluates the potential for sustained economic growth of 102 economies worldwide and ranks them accordingly Assesses the comparative strengths and weaknesses of the major economies of the world Is the world’s leading global monitor of the competitive condition of economies What are we trying to achieve? The Global Competitiveness Report

Slide 7: 

7 The Global Competitiveness Report

Slide 8: 

8 In the Global Competitiveness Report: Competitiveness is defined as An economy’s propensity to attain sustained economic growth in the medium to long term (over the coming 5 to 8 years) Competitiveness is not A country’s share of the world market for its products The Global Competitiveness Report

Slide 9: 

9 Why is it important? Competitiveness leads to growth Few things matter more for the welfare of a country’s citizens than the aggregate growth rate of the economy The challenge is to create the conditions for rapid and sustained economic growth The Global Competitiveness Report

Slide 10: 

10 The three determinants of competitiveness are: 1. Technology 2. Quality of Public Institutions 3. Macroeconomic Environment The Growth Competitiveness Index measures the current condition of these three determinants The Global Competitiveness Report

Slide 11: 

11 The two sources: Annual Executive Opinion Survey data Publicly available data The Global Competitiveness Report

Slide 12: 

12 Executive Opinion Survey Captures perceptions of the current operating environment from a representative sample of business leaders in each country Respondents compare their own operating environments with global standards on a wide range of dimensions The Global Competitiveness Report

Slide 13: 

13 The goal is not to predict economic growth in 102 miscellaneous economies The goal is to identify and analyze the strengths and weaknesses of the economies included in our sample The Global Competitiveness Report

Slide 14: 

14 Growth Competitiveness Index Contracts and law Sub-Index Macroeconomic stability Sub-Index Innovation Sub-Index The Global Competitiveness Report

Slide 15: 

15 Top 10 rankings (out of 102) Results and Analysis Top 10 transition economies (out of 102)

Slide 16: 

16 Results and Analysis In the 2003 Survey, Finland emerges as the most competitive economy in the world. It performes well not only in terms of overall macroeconomic management but also scores very high on those measures which assess the quality of its public institutions. Finland, as do most Scandinavian countries, exhibits very low levels of corruption and its firms operate in a legal environment where there is widespread respect for contracts and the rule of law.

Slide 17: 

17 Results and Analysis In the USA, which scores 2nd on the GCI, performance is a little more uneven. The country exhibits primacy in the area of technology, with specially high scores for such indicators as company spending on R&D, the creativity of the scientific community, personal computer use and internet penetration rates. However, this is offset by lower scores on the public institutions and macroeconomic environment indexes.

Slide 18: 

18 Results and Analysis What are some key insights that can be gained from the results of the 2003 GCI? (1) A strong macro performance without strong public institutions does not equal a competitively placed economy. This is well demonstrated by examples such as China. The country has a relatively strong macroeconomic performance, but performs poorly on the public institutions index.

Slide 19: 

19 Results and Analysis Furthermore, strong growth and stability at the present time offer no guarantee of a sustainable performance. This would be a particularly valuable lesson for countries such as the Russian Federation which have exhibited strong growth, and an improved fiscal and balance-of-payments performance over the past five years. Its recovery from crisis has been impressive but sustained growth will be difficult without substantial improvement in the quality of its public institutions, where Russia clearly ranks low:

Slide 20: 

20 Results and Analysis (2) Openness and sustained economic reforms are important for increased competitiveness. Countries such as Estonia, Hungary, Latvia and Slovenia are examples of the benefits of coherent policies implemented over prolonged periods of time. Estonia is the only country that has had to introduce agricultural subsidies and import duties to join the EU.

Slide 21: 

21 Results and Analysis (3) Globalization is important, but so is the domestic policy environment. Chile and Argentina have long faced the same external environment yet the two neighbours display a 50-country gap in their ranks in the GCI. There may well be many forces outside the control of governments, but a great deal can be achieved by good macroeconomic management and sustained, coherent reforms.

Slide 22: 

22 Part II. Hungary: Results from 2003-2004 Growth Competitiveness Index: Hungary among the transition economies

Slide 23: 

23 Part II. Hungary: Results from 2003-2004 The Macroeconomic Environment Index Hungary is placed 5th (out of 17) among the transition economies and 38th in the world

Slide 24: 

24 Part II. Hungary: Results from 2003-2004 Public Institutions Index Hungary is placed 2nd (out of 17) among the transition economies and 33rd in the world

Slide 25: 

25 Part II. Hungary: Results from 2003-2004 Technology Index: Innovation subindex Hungary is placed 5th (out of 17) among the transition economies and 32nd in the world

Slide 26: 

26 Technology Index: ICT subindex Hungary is placed 5th (out of 17) among the transition economies and 32nd in the world Part II. Hungary: Results from 2003-2004

Slide 27: 

27 Part II. Hungary: Results from 2003-2004 Technology Index: Technology Transfer subindex Hungary is placed 5th (out of 17) among the transition economies and 32nd in the world

Slide 28: 

28 Part II. Hungary: Results from 2003-2004

Slide 29: 

29 Part II. Hungary: Results from 2003-2004 NOTABLE COMPETITIVE ADVANTAGES RANK/102 Macroeconomic Environment Interest rate spread, 2002 12 Extent of distortive government subsidies 14 Access to credit 25 Country credit rating, 2003 30 Public Institutions Irregular payments in tax collection 22 Judicial independence 29 Irregular payments in public utilities 30 Technology FDI and technology transfer 6 Internet access in schools 27 Internet hosts, 2002 27 Utility patents, 2002 28 Cellular telephones, 2002 28

Slide 30: 

30 Part II. Hungary: Results from 2003-2004 NOTABLE COMPETITIVE DISADVANTAGES RANK/102 Macroeconomic Environment Government surplus/deficit, 2002 86 Real exchange rate, 2002 78 Inflation, 2002 69 National savings rate, 2002 52 Public trust of politicians 47 Diversion of public funds 41 Recession expectations 37 Public Institutions Favoritism in decisions of government officials 67 Organized crime 46 Property rights 37 Irregular payments in exports and imports 33 Technology Quality of competition in the ISP sector 94 Firm-level technology absorption 68 Company spending on research and development 67 Government success in ICT promotion 65 University/industry research collaboration 61 Government prioritization of ICT 50 Laws relating to ICT 49 Technological sophistication 47 Prevalence of foreign technology licensing 41 Personal computers, 2002 40 Tertiary enrollment 36 Internet users, 2002 36 Telephone lines, 2002 34

Slide 31: 

31 Evolution of Hungary’s position in the GCI over the last three years Part II. Hungary: Results from 2003-2004