Singapore Is IMD World Competitiveness Yearbook 2010 Champion
Singapore topped the International Institute for Management Development’s (IMD) World Competitiveness Yearbook 2010 rankings.
The World Competitiveness Scoreboard featured 58 industrialised and emerging economies.
It noted that Singapore had displayed great resilience through the economic crisis and was now taking full advantage of the strong expansion in the Asian region.
For the first time in decades, Singapore (1) and Hong Kong (2) have topped the USA (3) in IMD’s World Competitiveness Yearbook rankings. They are so close, however, that it would be better to define them as the leading “trio”.
In the first 10 places: Australia (5), Taiwan (8) and Malaysia (10) also benefit from strong demand in Asia. Switzerland (4) maintains an excellent position characterized by strong economic fundamentals (very low deficit, debt, inflation and unemployment) and a well-defended position on export markets.
Sweden (6) and Norway (9) shine for the Nordic model, although Denmark (13) surprisingly loses ground, in particular due to the pessimistic mood expressed in the survey.
Not surprisingly Germany (16) leads the larger “traditional” economies such as the UK (22), France (24), Japan (27) and Italy (40). Despite a significant budget deficit and growing debt, Germany’s performance is driven by strong trade (second largest exporter of manufactured goods), excellent infrastructure, and a sound financial reputation.
It was also to be expected that China (18) would lead the other BRIC nations, followed by India (31), Brazil (38) and Russia (51). And of course the credit-worthiness storm that affects Southern Europe acts as a drag on the performance of Spain (36), Portugal (37) and Greece (46).
NEW! THE DEBT STRESS TEST
(When will nations revert to a “bearable” public-debt level of 60% of their respective GDP?)
The largest “old” industrialized nations – from Japan to the UK – will all suffer a debt curse, in the worst case lasting until 2084. Nowadays, budget deficits are soaring and it is estimated that the average debt of the G20 nations, for example, will climb from 76% of their combined GDP in 2007 to 106% in 2010. Although the “great recession” is over, the consequences of the crisis will continue to be felt for quite some time.
The quality of debt depends both on the collateral and the capacity to repay. In short, countries such as Greece, Portugal and Spain have a credibility problem today not only because they have a debt crisis, but also because they lack the means to adequately repay (growth rate, current account balance, investments abroad, etc).
Other “sinners” (mostly the large industrial nations) have less of a credibility problem: in their case debt is a cost that will limit their competitiveness and the purchasing power of their people.
“The Debt Stress Test provides an early simplified indicator of the magnitude of the public debt issue for each nation,” states IMD Professor Stéphane Garelli, Director of the IMD World Competitiveness Center. “What matters is not only the absolute size of public debt but also the length of time required to absorb it. In the end, debt-stricken nations may suffer severe losses in competitiveness and standards of living.”
Topics: 2010, Asia, Asian region, business, competition, credit, econmy, economic development, economic growth, economic recovery, Economy, employment, G20, GDP, global economic crisis, Governance, government, gross domestic product, IMD, International Institute for Management Development, investment, jobs, moniter, monitor, news, Pacific, recession, Singapore, society, standard of living, World Competitiveness Yearbook 2010
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