An examination of the recently released Global Competitiveness Report, and how the Caribbean countries included in the assessment perform against over 140 economies.
Top 10 countries 2013-14 (Source: WEF)
On Tuesday, 3 September, the World Economic Forum (WEF) published the 2013–2014 edition of the Global Competitiveness Report, which evaluated the competitive landscape in 148 countries. The assessment, which is comprehensive in its scope, was not designed to focus on specific sectors, hence the results tend to indicate national competitiveness. However, based on the breadth and depth of the indicators examined, it is possible to use the outputs to also consider country competitiveness in relation to ICT and technology.
Within the 148 countries surveyed, seven Caribbean/CARCIOM countries were included: Barbados, the Dominican Republic, Guyana, Haiti, Jamaica, Suriname, and Trinidad and Tobago. This post highlights key findings of the latest Global Competitiveness Report, with specific focus on the Caribbean/CARICOM countries assessed.
Competitiveness indicators
The WEF defines competitiveness as “the set of institutions, policies, and factors that determine the level of productivity of a country”. Hence its assessment aims to capture and evaluate both the dynamic and static elements that point to, or drive productivity and competitiveness. The Global Competitiveness Index (GCI) measures 98 indicators categorized in three sub-indices under 12 pillars as shown in Table 1.
Table 1: Indices and pillars assessed towards determining the GCI (Source: WEF)
The final GCI score assigned to each country is calculated “based on successive aggregations of scores from the indicator level (i.e., the most disaggregated level) all the way up to the overall GCI score.” (Source: WEF). Typically, the arithmetic mean (which is layman’s terms is referred to as the average) is used to aggregate the scores, unless otherwise specified. The maximum score that can be obtained is 7.00.
How did Caribbean countries perform?
Out of the seven Caribbean countries included in the 2013—2014 assessment, Barbados was the top ranked Caribbean/CARICOM country, at 47th of 148 countries, with a score of 4.42, and having dropped three spots from last year. It was also the third most competitive country in the Latin America and the Caribbean region, behind Chile and Panama. In the country grouping under scrutiny, Barbados was by Trinidad and Tobago (92, with a score of 3.91), Jamaica (94, with a score of 3.86), Guyana (102, with a score of 3.77), Dominican Republic (105, with a score of 3.76), Suriname (106, with a score of 3.75), and finally Haiti (143, with a score of 3.11). Figure 1 provides a breakdown of the scores under the main sub-indices, which would have contributed to final score.
Figure 1: Scores for main sub-indices used to calculate the GCI for select Caribbean countries (Source: WEF)
Upon closer examination of the scores for the individual indicators, some clear strengths and weaknesses per country can be isolated, as shown in Table 2. Generally, there are few common strengths or weaknesses across the Caribbean/CARICOM region. Only two stand out:
- market size, a low-scoring pillar, which comprises indicators such as domestic market size, foreign market size, GDP, and exports as a percentage of GDP, and
- macroeconomic economy, another low-scoring pillar, which includes government budget balance, gross national savings, inflation, general, government debt, and country credit rating.
Table 2: Select strengths and weaknesses of the Caribbean countries assessed (Source: WEF)
Based on the scores achieved for the three sub-indices, the WEF was also able to draw some basic inferences on the main driver of competitiveness, which in turn reflects a country’s current strengths (see the ‘Resulting output’ in Table 1). In the Caribbean, the WEF considered the countries to be in the following stages of development:
- stage 1: factor-driven – Haiti
- transitioning from factor-driven to efficiency-driven – nil
- stage 2: efficiency-driven – Dominican Republic, Guyana, Jamaica, Suriname
- transitioning from efficiency-driven to innovation-driven – Barbados
- stage 3: innovation driven – Trinidad and Tobago.
Doing business in the Caribbean
Although the World Bank is expected to release its “Doing Business Report” in the next few weeks, the Global Competitiveness Report also highlights the challenges of doing business in the countries assessed. This information might be useful to the prospective entrepreneurs and start-ups, especially those in the ICT/tech industry, in order to prepare them for the likely difficulties they could face when embarking on the process of start a business. Table 3 highlights the top five challenges when starting a business in the Caribbean. It is emphasised that all of the factors listed could be problems in all of the countries, but the table below is focussing on the five most problematic ones.
Table 3: Top 5 most problematic factors for doing business in select Caribbean countries (Source WEF)
It is interesting to note that in most Caribbean economies corruption and inefficient government bureaucracy were considered the most problematic factors when starting a business. Crime and theft featured most prominently in Guyana, Jamaica, and Trinidad and Tobago. Additionally, although much has been made about the lack of access to finance, it was reported as being most problematic only in Haiti, and to a lesser extent, Jamaica.
Final thoughts…
In recent years, the competitiveness of Caribbean/CARICOM countries has been declining, which suggests that the rate at which those countries are improving their productivity and competitiveness is lower than what might be considered the global norm. The Global Competitiveness Report examines a broad range of factors and indicators that point to national competitiveness, but the region’s poor macroeconomic position may, to a considerable extent, underpin many of the other deficiencies identified.
Most countries in the region are still experiencing an economic decline, which is likely to continue into the foreseeable future. However, it is even more critical for governments to endeavour to create more enabling environments by implementing policies, removing bottlenecks and bureaucracy, fostering efficiency, etc., that encourage and facilitate investment and innovation.
Image credit: Sura Nualpradid (FreeDigitalPhotos.net)
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