Russia Moves Up 11 Places in the Global Competitiveness Report (MT)
The Moscow Times has reported that Russia has moved up 11 positions to 53rd out of 144 countries in the World Economic Forum’s latest Global Competitiveness Report 2014 – 2015 – putting it between the Philippines and Bulgaria. Russia’s overall rating was helped partly by improvements made in information and communications technology, and business sophistication.
Specifically, the report itself had this to say about Russia:
The Russian Federation is placed at 53rd position this year with some improvements related to the efficiency of goods markets (in particular domestic competition), ICT use, and business sophistication—although this arguably reflects some positive developments that took place before the Ukraine conflict started. At the time of writing, the Russian economy continues to face many deeply rooted challenges that will have to be addressed for the country to strengthen its competitiveness. Russia’s weak and inefficient institutional framework (97th) remains its Achilles heel and will require a major overhaul in order to eradicate corruption and favoritism (92nd) and re-establish trust in the independence of the judiciary (109th). Diversification of the economy will need reinforcing the very small SME sector as well as continued progress toward a stronger and more stable financial system (110th). These challenges prevent Russia from taking advantage of its competitiveness strengths, which are based on a well-educated population, fairly high levels of ICT use(47th), and its solid potential for innovation (65th). Going forward, the reverberations of the Ukraine conflict—such as sanctions and potential disruptions to the gas trade—could affect the country’s competitiveness.These implications could be especially serious given the reliance of the education and innovation sectors on public funding, which will become more scarce than it has been in previous years and for accessing technology developed abroad.
Interestingly enough, the Ukraine also moved up in the rankings to fall between the Slovak Republic and Croatia:
Ukraine moves up from 84th to 76th position, arguably reflecting expectations associated with its transition to a new government following the Euromaidan protests. The conflict in the eastern part of the country and in Crimea did not affect the results of the exercise in a substantial way, because it was still localized at the time when the Survey was conducted, yet it will most likely affect the country’s competitiveness going forward.The improvements in the GCI reflect more positive perceptions of institutions and the efficiency of markets.Other improvements reflect better educational outcomes,seen in a higher primary enrollment rate and more ICT use by individuals and business. At the time of writing,restoring peace in Eastern Ukraine is undoubtedly the country’s highest priority. However, far-reaching reforms will be necessary in order to put economic growth on a sustainable footing. These include an overhaul of the institutional framework (130th), along with measures to reduce the dominance of large companies in domestic markets (129th) and to make markets more competitive(125th) and hence more efficient (112th). A strengthening of financial markets would further help stabilize the economy and enable Ukraine to better take advantage of its numerous competitiveness strengths, such as its well-educated population and its market size, which is fairly large in the European context.
To read the whole article, Russia Goes Up 11 Places in Global Competitiveness Rating, go to the website of the Moscow Times. The Global Competitiveness Report 2014 – 2015 report can be downloaded on the World Economic Forum’s website.
- Resolving the SE Ukraine Conflict Would be a “Massive Buy Signal” for Russia (CNBC)
- Franklin Templeton’s $7.6bn Bond Bet on the Ukraine is 6X Bigger Than its Russian Bond Holdings (EM)
- Russia Consumer Confidence Falls in Latest Nielsen Survey
- Do You Need to Putin-proof Your Portfolio? (FE Trustnet)
- Russia Troubles Hit Emerging Markets – Including Emerging Europe (Barron’s)
- The 15 Most Miserable Emerging Market Economies (Bloomberg)
- Emerging Market Hedge Fund Assets Rise to a Record Despite Russian Losses (PR)
- Top Risks 2019: Bad Seeds (Eurasia Group)
- Infographic: Russia’s Sphere of Influence in Context (VOX)
- China Still Leads the BRICs in the Global Competitiveness Report