South Africa Falls to #56 in the Global Competitiveness Report
South Africa drifted downward to #56 from 53rd place in the World Economic Forum’s Global Competitiveness Report 2014 – 2015 with other so-called BRICS economies ranked as follows: China (28th), Russia (53rd), Brazil (57th) and India (71st). Nevertheless, only the island nation of Mauritius off the coast of Africa ranked better than South Africa at #39 while Rwanda (at #62) was the next African nation on the rankings list as most African nations continued to rank very poorly.
Here is what the World Economic Forum’s report had to say about South Africa:
South Africa continues its downward trend and falls to 56th place this year, third among the BRICS economies. South Africa does well on measures of the quality of its institutions (36th), including intellectual property protection (22nd), property rights (20th), the efficiency of its legal framework in challenging and settling disputes (9th and 15th, respectively), and its top-notch accountability of private institutions (2nd). Furthermore, South Africa’s financial market development remains impressive at 7th place, although our data point to more difficulties in all channels of obtaining finance this year. The country also has an efficient market for goods and services (32nd), and it does reasonably well in more complex areas such as business sophistication (31st) and innovation (43rd), benefiting from good scientific research institutions(34th) and strong collaboration between universities and the business sector in innovation (31st). South Africa’s transport infrastructure (32nd) is good by regional standards, although its electricity supply does suffer disruptions (99th). But the country’s strong ties to advanced economies, notably the euro area, has made it more vulnerable to the economic slowdown of those economies. These ties are likely to have contributed to the deterioration of fiscal indicators: its performance in the macroeconomic environment—having dropped sharply in the previous year—remains at 89th. Low scores for the diversion of public funds (96th), the perceived wastefulness of government spending (89th), and a more general lack of public trust in politicians (90th) remain worrisome, and security (95th) continues to be a major area of concern for doing business. Building a skilled labor force and creating sufficient employment also present considerable challenges. The health of the workforce is ranked 132nd out of 144 economies—as a result of high rates of communicable diseases and poor health indicators more generally. Higher education and training remains insufficient (86th) and labor market efficiency (113th) is affected by extremely rigid hiring and firing practices (143rd), wage inflexibly (139th), and continuing significant tensions in labor-employer relations(144th). Raising education standards and making its labor market more efficient will thus be critical in view of the country’s high unemployment rate of over 20percent, with its youth unemployment rate estimated at over 50 percent.
The Global Competitiveness Report 2014 – 2015 report can be downloaded on the World Economic Forum’s website.
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