SA has continued its downward spiral in the global competitiveness rankings.
The country has fallen to 67 out of 140 countries, the World Economic Forum’s (WEF’s) “
Competitiveness Report” for 2018-2019, released on Wednesday, showed.
This comes as a blow after SA fell into a recession for the first
time since the global financial crisis. There have been contractions in
nine of the 38 quarters since 2008 and growth has struggled to breach
the 2% mark.
While President Cyril Ramaphosa has announced an economic stimulus
plan to revive the stagnant economy, the World Bank among other
institutions has warned that the effect of this will be limited.
Finance minister Tito Mboweni is expected to provide more detail on
the plan at the medium-term budget policy statement next week.
“The index captures the long-term elements for growth in the country
over five years or more,” said WEF economist Roberto Crotti. “It takes
time between an announcement, implementation and the impact of a change
in policy.”
Importantly, the plan needs to demonstrate a strong sense of
collaboration between the public and private spheres, the different
sectors in the economy and with other economies, he said.
The overall index assesses a set of factors that determines an
economy’s level of productivity, a key driver for long-term growth. SA’s
ranking plummeted to 61 in 2017 from 47 in 2016.
The latest report uses a new methodology based on the rapid
transformation of the global economy due to the fourth industrial
revolution.
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