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South Africa ranked 50th for global competitiveness - WEF

World Economic Forum
07 September 2011

Country's score brought down by labour laws and govt inefficiency

Extract from World Economic Forum, The Global Competitiveness Report 2011-2012: Country Profile Highlights, September 7 2011

Sub-Saharan Africa has grown impressively over the last 15 years. It has bounced back rapidly from the global economic crisis, and its growth rates continue to exceed the global average. Indeed, some African countries improve with respect to national competitiveness this year. South Africa and Mauritius remain in the top half of the rankings, having advanced since last year. There have also been measurable improvements across specific areas in a number of other African countries. On the other hand, some significant declines have registered in countries that were previously striding ahead. More generally, subSaharan Africa as a whole lags behind the rest of the world in competitiveness, requiring efforts across many areas to place the region on a firmly sustainable growth and development path going forward.

South Africa moves up by four places to attain 50th position this year, remaining the highest-ranked country in sub-Saharan Africa and the second-placed among the BRICS economies. The country benefits from the large size of its economy, particularly by regional standards (it is ranked 25th in the market size pillar). It also does well on measures of the quality of institutions and factor allocation, such as intellectual property protection (30th), property rights (30th), the accountability of its private institutions (3rd), and its goods market efficiency (32nd).

Particularly impressive is the country's financial market development (4th), indicating high confidence in South Africa's financial markets at a time when trust is returning only slowly in many other parts of the world. South Africa also does reasonably well in more complex areas such as business sophistication (38th) and innovation (41st), benefiting from good scientific research institutions (30th) and strong collaboration between universities and the business sector in innovation (26th).

These combined attributes make South Africa the most competitive economy in the region. However, in order to further enhance its competitiveness the country will need to address some weaknesses. South Africa ranks 95th in labor market efficiency, with rigid hiring and firing practices (139th), a lack of flexibility in wage determination by companies (138th), and significant tensions in labor-employer relations (138th).

Efforts must also be made to increase the university enrollment rate of only 15 percent, which places the country 97th overall, in order to better develop its innovation potential. In addition, South Africa's infrastructure, although good by regional standards, requires upgrading (62nd). The poor security situation remains another important obstacle to doing business in South Africa.

The business costs of crime and violence (136th) and the sense that the police are unable to provide protection from crime (95th) do not contribute to an environment that fosters competitiveness. Another major concern remains the health of the workforce, which is ranked 129th out of 142 economies-the result of high rates of communicable diseases and poor health indicators more generally.

Full breakdown of South Africa's rank and scoring on different components of competitiveness index:

Index

Rank

Score

GCI Global Competitiveness Index 2011-2012

50

4.34

 A Basic requirements SubIndex

85

4.32

A.01 1st pillar: Institutions

46

4.36

A.01.01 A. Public institutions

52

4.09

A.01.01.01 1. Property rights

27

5.18

 1.01 Property rights

30

5.29

 1.02 Intellectual property protection

30

4.97

A.01.01.02 2. Ethics and corruption

66

3.33

 1.03 Diversion of public funds

81

2.95

 1.04 Public trust of politicians

88

2.40

 1.05 Irregular payments and bribes

48

4.64

A.01.01.03 3. Undue influence

52

3.73

 1.06 Judicial independence

35

4.97

 1.07 Favoritism in decisions of government officials

114

2.48

A.01.01.04 4. Government inefficiency

38

4.10

 1.08 Wastefulness of government spending

69

3.18

 1.09 Burden of government regulation

112

2.73

 1.1 Efficiency of legal framework in settling disputes

16

5.03

 1.11 Efficiency of legal framework in challenging regs

19

4.72

 1.12 Transparency of government policymaking

34

4.84

A.01.01.05 5. Security

110

4.10

 1.13 Business costs of terrorism

33

6.11

 1.15 Organized crime

112

4.16

 1.16 Reliability of police services

95

3.63

A.01.02 B. Private institutions

27

5.17

A.01.02.01 1. Corporate ethics

51

4.36

 1.17 Ethical behavior of firms

51

4.36

A.01.02.02 2. Accountability

3

5.98

 1.18 Strength of auditing and reporting standards

1

6.49

 1.19 Efficacy of corporate boards

2

5.80

 1.2 Protection of minority shareholders' interests

3

5.84

 1.21 Strength of investor protection, 0-10 (best)*

10

8.00

A.02 2nd pillar: Infrastructure

62

4.02

A.02.01 A. Transport infrastructure

33

4.59

2.01 Quality of overall infrastructure

60

4.51

2.02 Quality of roads

43

4.76

2.03 Quality of railroad infrastructure

46

3.36

2.04 Quality of port infrastructure

50

4.70

2.05 Quality of air transport infrastructure

17

6.14

2.06 Available airline seat kilometers per week, millions*

24

1,152.64

A.02.02 B. Electricity and telephony infrastructure

97

3.45

2.07 Quality of electricity supply

97

3.72

2.08 Fixed telephone lines/100 pop.*

100

8.43

2.09 Mobile telephone subscriptions/100 pop.*

71

100.48

A.03 3rd pillar: Macroeconomic environment

55

4.96

3.01 Government budget balance, % GDP*

104

-5.71

3.02 National savings rate, % GDP*

72

19.96

3.04 Interest rate spread, %*

36

3.37

3.05 General government debt, % GDP*

54

35.74

3.06 Country credit rating, 0-100 (best)*

48

63.30

A.04 4th pillar: Health and primary education

131

3.96

A.04.01 A. Health

129

4.14

4.01 Business impact of malaria

103

5.00

4.02 Malaria cases/100,000 pop.*

90

67.37

4.03 Business impact of tuberculosis

135

3.44

4.04 Tuberculosis incidence/100,000 pop.*

141

971.00

4.05 Business impact of HIV/AIDS

132

3.01

4.06 HIV prevalence, % adult pop.*

139

17.80

4.07 Infant mortality, deaths/1,000 live births*

111

43.10

4.08 Life expectancy, years*

130

51.62

A.04.02 B. Primary education

125

3.78

4.09 Quality of primary education

127

2.40

4.1 Primary education enrollment, net %*

118

84.65

 B Efficiency enhancers SubIndex

38

4.44

B.05 5th pillar: Higher education and training

73

4.03

B.05.01 A. Quantity of education

84

4.24

5.01 Secondary education enrollment, gross %*

51

93.87

5.02 Tertiary education enrollment, gross %*

97

15.41

B.05.02 B. Quality of education

112

3.30

5.03 Quality of the educational system

133

2.33

5.04 Quality of math and science education

138

2.08

5.05 Quality of management schools

13

5.43

5.06 Internet access in schools

100

3.37

B.05.03 C. On-the-job training

35

4.55

5.07 Availability of research and training services

47

4.44

5.08 Extent of staff training

27

4.65

B.06 6th pillar: Goods market efficiency

32

4.66

B.06.01 A. Competition

28

4.80

B.06.01.01 1. Domestic competition

22

4.81

 6.01 Intensity of local competition

49

5.15

 6.02 Extent of market dominance

37

4.29

 6.03 Effectiveness of anti-monopoly policy

7

5.33

 6.04 Extent and effect of taxation

28

4.06

 6.06 No. procedures to start a business*

34

6.00

 6.07 No. days to start a business*

84

22.00

 6.08 Agricultural policy costs

37

4.23

 6.05 Total tax rate, % profits*

36

30.50

B.06.01.02 2. Foreign competition

62

4.72

 6.09 Prevalence of trade barriers

51

4.68

 6.11 Prevalence of foreign ownership

34

5.23

 6.12 Business impact of rules on FDI

55

4.85

 6.13 Burden of customs procedures

62

4.23

 6.14 Imports as a percentage of GDP*

108

31.36

 6.1 Trade tariffs, % duty*

72

5.92

B.06.02 B. Quality of demand conditions

41

4.38

6.15 Degree of customer orientation

67

4.64

6.16 Buyer sophistication

31

4.13

B.07 7th pillar: Labor market efficiency

95

4.06

B.07.01 A. Flexibility

119

3.94

7.01 Cooperation in labor-employer relations

138

3.28

7.02 Flexibility of wage determination

138

3.04

7.05 Redundancy costs, weeks of salary*

46

24.00

7.03 Rigidity of employment index, 0-100 (worst)*

90

35.00

B.07.02 B. Efficient use of talent

63

4.18

7.06 Pay and productivity

130

2.98

7.07 Reliance on professional management

18

5.49

7.08 Brain drain

48

3.80

7.09 Women in labor force, ratio to men*

76

0.76

B.08 8th pillar: Financial market development

4

5.48

B.08.01 A. Efficiency

23

4.51

8.01 Availability of financial services

3

6.33

8.02 Affordability of financial services

39

4.87

8.03 Financing through local equity market

4

5.13

8.04 Ease of access to loans

36

3.26

8.05 Venture capital availability

44

2.93

B.08.02 B. Trustworthiness and confidence

2

6.46

8.06 Soundness of banks

2

6.62

8.07 Regulation of securities exchanges

1

6.36

8.08 Legal rights index, 0-10 (best)*

8

9.00

B.09 9th pillar: Technological readiness

76

3.60

B.09.01 A. Technological adoption

37

5.39

9.01 Availability of latest technologies

39

5.69

9.02 Firm-level technology absorption

30

5.54

9.03 FDI and technology transfer

41

4.96

B.09.02 B. ICT use

102

1.80

9.04 Internet users/100 pop.*

105

12.30

9.05 Broadband Internet subscriptions/100 pop.*

96

1.48

9.06 Internet bandwidth, kb/s/capita*

112

0.21

9.07 Household with a computer, %

86

18.33

B.10 10th pillar: Market size

25

4.81

B.10.01 A. Domestic market size

24

4.71

10.03 GDP (PPP)*

25

523.95

10.04 Exports as a percentage of GDP*

97

26.85

10.01 Domestic market size index, 1-7 (best)*

24

4.71

B.10.02 B. Foreign market size

38

5.12

10.02 Foreign market size index, 1-7 (best)*

38

5.12

 C Innovation and sophistication factors SubIndex

39

3.93

C.11 11th pillar: Business sophistication

38

4.32

11.01 Local supplier quantity

47

4.99

11.02 Local supplier quality

31

5.16

11.03 State of cluster development

46

3.92

11.04 Nature of competitive advantage

97

3.01

11.05 Value chain breadth

100

3.11

11.06 Control of international distribution

26

4.61

11.07 Production process sophistication

41

4.32

11.08 Extent of marketing

31

4.94

11.09 Willingness to delegate authority

32

4.27

C.12 12th pillar: Innovation

41

3.53

12.01 Capacity for innovation

46

3.38

12.02 Quality of scientific research institutions

30

4.67

12.03 Company spending on R&D

36

3.56

12.04 University-industry collaboration in R&D

26

4.62

12.05 Gov't procurement of advanced tech products

103

3.26

12.06 Availability of scientists and engineers

111

3.40

12.07 Utility patents granted/million pop.*

42

2.30

136

2.51

* Denotes hard data

Source: World Economic Forum, September 7 2011

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If you come across comments that are injurious, defamatory, profane, off-topic or inappropriate; contain personal attacks or racist, sexist, homophobic, or other slurs, please report them and they will be removed.
 
 responses to this article

Bollocks...!
These stats would be believable if they were not derived from interviews with 57 business executives (most of whom are white and most of whom are male). They are as believable as a finding by members of the ANC NEC that the ANC is the best political party . .more

by Charles on September 07 2011, 13:25
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Our leadership should pay attention to this report
This is a very good indicator of how things are being run in our country.

by Apb on September 07 2011, 16:24
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@Charles
And as believable as the HRW report on the tribulations of farm workers. Of course the HRW "report" was propaganda, pure and simple.

by Mute Fool on September 07 2011, 20:26
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So bad...
See the quality of education, despite such a massive budget. Africa should really try to Westernise/modernize, that would help them. But the "Revolutionary comrades" hop around on one leg and burn things...so funny.

by Kurt on September 07 2011, 21:22
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Forward with the socio-economic revolution
The challenges that we face as a nation do not stem from our hopping and chanting but rather from the subdued intensity of the same. Comrades,beware of naysayers the ilk of whom have a deep seated spite of the successes and achievements of our unique . .more

by Timile B on September 08 2011, 07:41
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@Timile B
My man, you are demented.

by Insomnia on September 08 2011, 12:47
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