How competitive are we? China shows where we stand

India dropped five places and ranks 56th, behind Azerbaijan and just ahead of Slovenia, in the The Global Competitiveness Report’s ranking for 2011-12. China ranks 26th while Singapore has gained a place to take the second spot behind Switzerland.

[caption id=“attachment_78338” align=“alignleft” width=“380” caption=“Russia (66) is the only country among BRICS nations to trail India. Reuters”] [/caption]

The report makes some scathing comments on India. It criticises India’s weak physical infrastructure and poor healthcare standards. But the report does acknowledge that India’s financial markets are among the most developed in the world. Yet, the benefit of this sophistication is not translating into overall development.

Here are some key points:

* India is behind China (26), South Africa (50) and Brazil (53). Russia (66) is the only country among BRICS nations to trail India. The comparison with China is the key here. The report observes that the competitiveness gap between China and India is widening. “India continues to be penalised for its mediocre accomplishments in the areas considered to be the basic factors underpinning competitiveness,” the report said.

* The infrastructure in India remains largely insufficient and ill-adapted to the business needs. Many cite infrastructure as the single biggest hindrance. India is ranked 89th among 142 countries on the infrastructure parameter.

* In the health and basic education space, India’s rank is 101. Despite improvements

across the board over the past few years, public health and education quality remain a prime cause of concern, the report says.

* On the issue of corruption, India is 99th among 142 countries. India’s score in the institutional pillar segment has plunged, the report states. Once ranked a satisfactory 37th in this category, India now ranks 69th, having dropped 11 places this year alone.

* The report praises the competitiveness of India’s businesses and financial markets. In terms of sophistication in financial markets, India ranks 21st in the world. The agency also ranks high on business sophistication and innovative nature of businesses, at 38th, in the world.

Meanwhile, United States continues its decline for the third year in a row, falling one more place to the 5th position. In addition to the macroeconomic vulnerabilities that continue to build, some aspects of the United States’ institutional environment continue to spark concern among business leaders, particularly those related to low public trust in politicians and concerns about government inefficiency.

The Global Competitiveness Report’s competitiveness ranking is based on the Global Competitiveness Index (GCI), developed for the World Economic Forum by Sala-i-Martin and introduced in 2004. The GCI comprises 12 categories - the pillars of competitiveness - which together provide a comprehensive picture of a country’s competitiveness landscape. The pillars are: institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication and innovation.