RI competitiveness ranking moves up

Andi Haswidi ,  The Jakarta Post ,  Jakarta   |  Fri, 05/16/2008 12:42 PM  |  Headlines

Indonesia has improved its position three notches up to 51st in the latest world competitiveness rankings, but remains far below other emerging economies in Southeast Asia.

The World Competitiveness Yearbook 2008, published Thursday, shows that Indonesia still ranks lower compared to regional counterparts such as the Philippines at 40th, Thailand at 27th, Malaysia at 19th and Singapore in 2nd place.

The Yearbook, published by the Switzerland-based IMD business school, is one of the most prestigious and comprehensive annual reports on country competitiveness, with criteria used encompassing: economic performance, government efficiency, business efficiency and infrastructure.

Despite showing signs of weakness, topping the competitiveness chart for 15 consecutive years is the United States, beating all 54 other countries surveyed in terms of amount of investments, stock purchases and commercial service exports.

The United States also ranks as the easiest place to secure venture capital for business development and dominates all other economies in key technology criteria such as computers in use.

However, IMD professor Stephen Garelli said U.S. economic health is vulnerable because of heavy reliance on the financial sector for corporate profits.

Following the United States and Singapore is Hong Kong in the third place, followed by Switzerland, Luxemburg, Denmark, Australia, Canada, Sweden and Netherlands.

On the other hand, two of Asia's biggest economies, China and India, moved two places down at 17th and 29th respectively.

In an attempt to assess the main issues that will affect the world competitiveness landscape over the next decades, Garelli projected that oil prices would remain under pressure at above US$100 a barrel with consumption doubling to 130 million barrels per day by 2030.

China and India, he said, would account for 45 percent of consumption growth.

"As a consequence of the growth of emerging markets and changes in consumption patterns, prices for basic commodities such as rice, wheat and fish will more than double. Shortages will appear," Garelli said.

The world, he said, is moving away from a competitiveness model based on cheap manpower to one based on cheap brainpower. According to IMD records, India, China and Russia produce 14 million university students each year, as many as the United States.

"Through technology, these brains can be accessed from all over the world," he said.

As a result, the three countries will regain their age-old status as technological powers, prompting more foreign companies to transfer research centers to these countries, he said.

Interestingly enough, Garelli projected that as communications and travel became more pervasive, a part of the population in the Western industrial nations will reject excessive mobility and rediscover the attractiveness of the local environment.

"Congestion in cities, airports and most transportation systems takes away the attractiveness of mobility," he said.

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