http://news.ft.com/cms/s/4fb2883c-3087-11da-ba9f-00000e2511c8.html
"WEF says the "stellar performance" of the Nordic countries - all of which
are in the top 10 - is due to sound economic management and efficient
public institutions. It argues this challenges "the conventional wisdom
that high taxes and large safety nets undermine competitiveness, suggesting
that what is important is how well government revenues are spent, rather
than the tax burden."
----------------------------------------------------
Financial Times-UK
Nordic states top of list for competitiveness
By Frances Williams in Geneva
Published: September 29 2005 03:00 | Last updated: September 29 2005 03:00
Finland, followed by the US and Sweden, remains the most competitive
economy in the world, according to the latest rankings from the World
Economic Forum.
Geneva-based WEF, best known for organising the Davos business forum, has
ranked 117 economies on a range of criteria intended to capture the
determinants of productivity and growth.
These criteria, drawn from statistical sources and a survey of nearly
11,000 business leaders, include economic indicators, technological
competence and innovation, and the quality of public institutions.
Thus the US, despite "overall technological supremacy", is let down by poor
economic management and the perceived negative influence of business
lobbies on government policy.
None of the other members of the Group of Eight large industrialised
nations is in the top 10. Japan is in 12th place, followed by the UK,
Canada and Germany.
Respondents in the UK, down to 13th place, cited an inadequately educated
workforce as the most problematic factor of doing business in the UK. This
was followed by tax regulation - with Britain ranked 67th in terms of the
efficiency of its tax system - and inadequate infrastructure.
While ranked number one for the sophistication of its financial markets,
Britain came 51st for its burden of government regulation.
WEF says the "stellar performance" of the Nordic countries - all of which
are in the top 10 - is due to sound economic management and efficient
public institutions. It argues this challenges "the conventional wisdom
that high taxes and large safety nets undermine competitiveness, suggesting
that what is important is how well government revenues are spent, rather
than the tax burden per se".
Another big state spender, France, though the third most popular
destination for foreign investment, trailed at 30. Italy, at 47, was the
worst performing European Union country apart from Poland, which has
nevertheless jumped nine places to 51. Russia, meanwhile, has slipped to
75.
China and India, which have notched up impressive economic growth in recent
years, are ranked at 49 and 50 respectively, reflecting a fall of three
places for China and a gain of five places for India since last year.
But, warns Augusto Lopez-Claros, WEF's chief economist, both countries
suffer from institutional weaknesses that could slow their "ascension to
the top tier" of the world's most competitive economies.
In Latin America, Chile (23) leads the pack with Venezuela sliding further
to 89. Though African countries are mostly grouped near the bottom of the
rankings, relative success stories include South Africa (42), Botswana (48)
and Mauritius (52).
Rival competitiveness rankings by the IMD management school in Lausanne use
a similar methodology to that of WEF, though differences in the indicators
and their weightings produce some variation in results.
The latest IMD league table, published in May, put the US, Hong Kong and
Singapore in the first three places - but, like WEF, gave high ratings to
the Nordics, Switzerland and Australia.
The most notable divergence concerns Hong Kong, which WEF ranks in 28th
place, citing worries over judicial independence, favouritism in
policymaking and corruption
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