South Africa’s global competitiveness has slipped to 62 out of 64 countries rated according to the 2021 World Competitiveness Yearbook (WCY).
The slide is attributed to deteriorating headline and youth unemployment, rising public debt levels amid a shrinking fiscal space, lack of decisive plans to revive the struggling economy, ongoing electricity supply problems and rolling blackouts as well as slow vaccination rates to fast track the post Covid-19 recovery.
“Covid-19 pandemic has presented countries with new and far reaching challenges for their local economies. Over and above the health crisis wrought by the pandemic, Covid-19 has diminished the ability of countries to facilitate a conducive environment in which business can thrive,” said chief economist at Productivity SA, Leroi Raputsoane.
The report is based on statistical data obtained from international and national sources such as World Bank, International Monetary Fund, Stats SA, and the South African Reserve Bank.
The Institute of Management Development (IMD) World Competitiveness Yearbook is an annual report that ranks the international competitiveness of 64 selected countries and is recognised internationally as the leading survey of competitiveness between nations. The rankings are drawn from a combination of hard data and an Executive Opinion Survey. Productivity SA is the information partner institute for the IMD in South Africa.
The report evaluates each country’s data based on about 346 distinct criteria, which are grouped into four factors, where South Africa, out of 64 selected countries, scored 61st on economic performance, government efficiency as well as infrastructure, but dipped to 58th on business efficiency.
IMD indicated that Switzerland topped the rankings, followed by Sweden, Denmark, the Netherlands and Singapore.
South Africa’s peers, the Brazil Russia China South Africa (Brics) block was topped by Brazil (57th), Russia (45th), India (43rd), China (20th).
IMD’s Professor Arturo Bris, said: “Competitiveness provides the framework to quantify the outcome of dealing with the challenges, such as international trade and investment, employment, the openness, political stability, etc from a country perspective. Ultimately, it allows the IMD to recognise the factors that facilitate prosperity, and this is how the institute expects its rankings to be used and interpreted that competitiveness is both a tool and an objective of economic policy.”
In a keynote address at the launch of the report, Deputy Minister of Employment and Labour Boitumelo Moloi said: “We are all aware that the last time we had the best rating was almost 16 years ago in 2005 and appreciate that at the time there was no pandemic. But we are also mindful that it is not only the pandemic that wreaks havoc on economies, but the general lack of preparedness in innovation and technology as well as research and development that contributed to the delay in economic rebound,” she said.