See More on Facebook

Economics

Asia in spotlight in WEF competitiveness index

The World Economic Forum has released the latest version of its Global Competitiveness Index, and this time, the list is unlike any it has compiled before.


Written by

Updated: October 22, 2018

The 2018 edition of the World Economic Forum’s competitiveness Index saw China slip down in the rankings on the back of a slowing macroeconomic situation and longstanding barriers within the Chinese work force. Elsewhere, Asia’s two marture economies in Japan and Korea improved due to new policies enacted by their respective governments to build more inclusive, diverse workforces.

According to Singapore Deputy Prime Minister Tharman Shanmugaratnam, employers and educators must address a fundamental challenge for competitiveness, which is to create quality jobs for the future.

“It is a challenge because, one way or another, if we succeed in improving speed and efficiency, there will not as be as many jobs in manufacturing in the long term. There will be jobs, there will be much higher quality jobs, but they will not be as many.

“We’ve got to create jobs outside of manufacturing, so that it is still a job-rich future, quality jobs in every sector of the economy. And this is a major challenge for all countries,” said Mr Tharman.

The 2018 edition of the rankings used a completely overhauled methodology that gave priority to digital age factors such as idea generation and agility, integrating what WEF calls the Fourth Industrial Revolution into the standards of competitiveness, and adapting the report to account for the importance of technology as a driver of economic progress in the modern era.

The countries on the upswing

Singapore, a regional economic powerhouse, comes in at second on the list, but was beat out for the first position by the United States, which placed in the top spot thanks to the new methodology. While Singapore didn’t make it to the very top, the report did deem the country to be the most “future ready” according to the World Economic Forum’s idea of the Fourth Industrial Revolution, and credited the “openness” of the country’s markets as a key driver of its success.

The report counts Japan as its “most improved” out of the top ten economies. The country rose three spots to be fifth overall on the Index. The WEF points out that Japan is already a standout as an innovation hub but needs to improve with regard to the “‘softer’ drivers of the innovation ecosystem”—the country scores low on such soft skills as entrepreneurial culture, risk-taking and critical-thinking.

South Korea rose by on the list by two spots, placing 15th on the Index. The report notes that the country boasts some of the highest rates of ICT adoption and spending on research and development. In fact, the only country in the world that spends a higher percentage of its GDP on R&D is Israel. Seoul’s most notable achievements were in the areas of ICT adoption and macroeconomic stability, where it maintained the No. 1 position. The country was also evaluated as the sixth most competitive in terms of infrastructure. Its weaknesses were its product market and its labor market, which respectively ranked 67th and 48th in the world, the report showed. The most serious problems in these areas included market monopolies, labor relations and workers’ rights.

Malaysia improved its ranking by one spot, placing 25th on this year’s list. Malaysia was one of only three non-high-income countries that cracked the list’s top 40—the other two were China at 28th, and Thailand at 38th, which climbed two spots since last year. The country’s best performing index was its macroeconomic stability where it was given a perfect score of 100.

The report bumped Indonesia up by two spots this year at 45th. According to the report, the country scored points for its vibrant entrepreneurial culture and business dynamism, but fell short on factors related to innovation and infrastructure.

India rose by five places compared with the backcast 2017 data to land at 58th on the list. According the the WEF report, that represents the largest gain among the G20 economies. The report states that India remains its region’s main driving force through the sheer size of its economy and the quality of its research institutions.

The Philippines improved its standing on the list by 12 full places, coming in at 56th. However, the report also placed the country on a list that is not so complimentary. “Nigeria, Yemen, South Africa, Pakistan and the Philippines” the report says, “are other countries with notable problems related to violence, crime or terrorism, and where the police are considered unreliable.” This weaker performance when it comes to a key pillar, “security” is one of the factors holding the Philippines from climbing even higher when it comes to competitiveness.

Taiwan, which remained stable on the list at 13th, was described by the report as one of the region’s primary innovation hubs, but it like South Korea and Japan has been cautioned not to forget innovation’s softer side.

The countries that lost ground

China slipped by one top spot, down to 28th, in this year’s list, but it still leads the BRICS economies in the rankings. The report calls out China’s competitive edge in some key areas like artificial intelligence, while cautioning that in order to pull in line with “super innovators” like the United States, Germany and Switzerland it will need to invest more in areas the country has overlooked—diversity, collaboration and openness.

Bangladesh slipped lower on the list, but only by one spot, down to 103. The country’s overall score improved from 2017-2018, but Bangladesh’s position fell in nine of the twelve pillars on which the WEF assigns rankings. The country’s lowest rankings are in business dynamism, for which it ranked 120th and product market development, for which it ranked 123rd among the 140 countries

Sri Lanka slipped four places on the list from last year’s backcast data down to 85th. However, in this case perhaps remaining a relatively small slip might be viewed as a good thing, since the country landed at after experiencing a drop of 14 full slots from 2016-2017 year’s rankings. The report commended Sri Lanka for its standout health and education indicators—the country has the the highest healthy life expectancy in its region (67.8 years) and the workforce with the highest amount of schooling (9.8 years).

Pakistan slipped just one spot on the list compared to its position last year with a new ranking of 107 out of 140 countries. The country ranked particularly low on the list with regards to ICT adoption—where it was placed 127—and press freedom—at the 112th position.

Cambodia dropped by one spot to 110th, Laos slipped two spots to come in at 112th and Mongolia lost four places to come in at 99th. All three countries, according to the report, show “major weaknesses that threaten sustained growth.” These weaknesses, WEF says, make them vulnerable to shocks such as faster-than-expected rise in interest rates in advanced economies and escalating trade tensions.

The WEF was unsurprised by Nepal’s slip in the rankings. The country is ranked 109th, a drop of one spot since last year. Addressing the country’s economic growth, the report says a “slowdown is expected after the fast recovery of 2017 when the country rebounded from the aftermath of the 2015 earthquake.”

Vietnam, which dropped three spots in the rankings to 77th was nonetheless touted by the report, along with Cambodia, Laos, the Philippines and China as having experienced economic growth exceeding 6 percent in 2017.



Enjoyed this story? Share it.


Quinn Libson
About the Author: Quinn Libson is an Associate Editor at Asia News Network

Eastern Briefings

All you need to know about Asia


Our Eastern Briefings Newsletter presents curated stories from 22 Asian newspapers from South, Southeast and Northeast Asia.

Sign up and stay updated with the latest news.



By providing us with your email address, you agree to our Privacy Policy and Terms of Service.

View Today's Newsletter Here

Economics

Italy to play a key role as Belt and Road opens new doors across globe

Italy will be a major part of China’s Belt and Road initiative. East-West relations have entered a new phase. Global integration, with sustained increases in crossborder exchanges of goods, technology, knowledge and resources, has reshaped international relations, spurring economic development of traditionally marginal regions and encouraging economic convergence among poorer and richer areas. The phenomenon has received great impetus from the possibilities offered by technological progress and the increase in physical and digital connectivity, strongly enhanced by the modernization and innovation efforts of Asian countries. What we have seen and are still seeing, indeed, is not a simple shift of production from the West to the East, but a real change in production models. The production and consumption of goods and services have followed value chains that are no longer confined to a local scale, but are


By China Daily
March 22, 2019

Economics

No sign of concrete policies for conflict in Thailand’s restive south

Parties offer few if any answers for a 15-year-old deadly insurgency that successive govts have failed to quell. Peace and conflict have never been significant parts of any political party platform in Thailand. This is because a sustainable solution calls for long-term commitment to a policy that could prove to be politically costly. Lasting peace requires self-reflection on the part of both the state and society. Policymakers have to rethink the policy of assimilation that has so far been rejected by the Malay Muslim populace of the southern border provinces because it comes at the expense of their cultural and religious identity. Full-fledged armed insurgency erupted in the far South in the 1960s, some 50 years after the signing of the Anglo-Siam Treaty that defined our current political borders. There was a brief calm in the 1990s, but the absence of violence did not mean peace. A new generat


By The Nation (Thailand)
March 22, 2019

Economics

Mahathir chairs economic meeting, cost of living takes centre stage

The Economic Action Council’s main aim is to spur and stimulate sustainable economic growth. Prime Minister Mahathir Mohamad chaired the first meeting of the  Economic Action Council (EAC), which had tackling the cost of living high on the agenda. The meeting on Wednesday (March 20) looked at measures to improve the living standards of the B40 group. The Economic Affairs Ministry, which acts as the secretariat to the EAC, said that three papers were presented by representatives from the ministry, as well as the Domestic Trade and Consumer Affairs Ministry. “Aside from the cost of living, the idea of social entrepreneurship as a platform to improve the livelihood of B40 households was also brought to the meeting’s attention, as well as the implementation of decisions made by the National Action Coun


By The Star
March 21, 2019

Economics

Is Kim Jong-un considering ‘new way’?

Post Hanoi summit failure, speculation grows on what new mode of defense may be. Following the failure to reach an agreement at last month’s summit between the US President Donald Trump and North Korean leader Kim Jong-un in Hanoi, tension has been building between the two sides, threatening the negotiations that they have built over the past year. While the breakdown of their second meeting did not lead to a war of words, North Korea said it was considering suspending talks with the United States, while Washington accused Pyongyang of “not doing what it needs to do.” The communist leader warned in his New Year’s speech this year he would have to find a new way for defending the North if the US did not keep its promises. As the US appears to have no intention of taking the “commensurate measures” the North seeks for the denuclearization steps it has taken, speculation has grown as to whether


By The Korea Herald
March 20, 2019

Economics

Opinion: Japan must return to being South-east Asia’s top trade partner

Singapore’s Ambassador-at-Large Tommy Koh called on Japan to return to Asean as its top investor, as it was in the 1970s and 1980s. Veteran diplomats jousted at a public forum here over the question of whether Japan is sufficiently invested in South-east Asia, amid the former’s concerns about China’s growing influence in the region. Singapore’s Ambassador-at-Large Tommy Koh called on Japan to return to Asean as its top investor, as it was in the 1970s and 1980s. “You were Asean’s number one trade partner. Now you are number four. You were also number one in foreign direct investments. Now you are not. You have lost so much ground in South-east Asia,” he said.


By The Straits Times
March 20, 2019

Economics

South Korea says punishing women for abortion unconstitutional

The decision was made by the country’s National Human Rights Commission. The National Human Rights Commission of Korea has delivered its opinion to the Constitutional Court that criminal penalties for women who undergo abortion, as well as doctors who perform them, are unconstitutional. The current law on abortion violates the right to self-determination, among others, the rights panel said Monday. Marking the first time the rights panel has ever expressed an official position on the highly volatile issue, it sent its statement to the court last week ahead of next month’s ruling on the constitutionality of the nation’s abortion laws.


By The Korea Herald
March 19, 2019