Switzerland has knocked the U.S. off the top slot as the world’s most competitive economy as the crash of the U.S. banking system left it more exposed to some long-standing weaknesses, according to the World Economic Forum’s global competitiveness report for 2009/2010. This showed economies with a large focus on financial services such as the U.S., the U.K. or Iceland were the losers of the crisis, said Reuters. The U.S. as the world’s largest economy lost last year’s strong lead, slipping to number two for the first time since the introduction of the index in 2004. In the assessment of banks’ soundness, the Alpine country still ranked 44th. U.S. banks fell to 108 — right behind Tanzania — and British banks to 126 in the ranking, now topped by Canada’s banks. The WEF bases its assessment on factors such as economic and health data and the number of internet users. The study also factors in a survey among business leaders, assessing for example the government’s efficiency or the flexibility of the labor market. The WEF applauded Switzerland for its capacity to innovate, sophisticated business culture, effective public services, excellent infrastructure and well-functioning goods markets. Brazil, India and China improved their competitiveness despite the crisis, the report showed. Russia saw one of the steepest declines among the 133 countries assessed, falling back 12 places to 63, as worries about government efficiency and judicial independence rose. After years of improvement, which took it to place 29, China now had to tackle shortcomings in areas such as financial markets, technological readiness and education as it could no longer rely on cheap labor alone to generate growth. India, ranked 49th, was in turn well positioned in complex fields such as innovation but had still to catch up on basics such as health or infrastructure. Brazil leapt by 8 ranks to 56th, as measures to improve fiscal sustainability and to liberalize and open the economy showed effects. Among the top 10, Singapore moved up to third from fifth, swapping positions with Denmark, which fell behind fellow-Nordic country Sweden. Finland as 6th and Germany as 7th stayed put while Japan and Canada overtook the Netherlands. The WEF study named African countries Zimbabwe and Burundi as the world’s least competitive economies.
Switzerland Tops U.S. as World’s Most Competitive Economy
The U.S. as the world’s largest economy lost last year’s strong lead, slipping to number two for the first time since the introduction of the index in 2004.
September 9, 2009