Global ranking shows SA is punching below its weight

SA has fallen one notch down a ranking of the world’s most competitive countries, reflecting its lack of sustainable growth as well as high levels of structural unemployment and lack of access to quality education.

SA now ranks 53 of 63 countries, down from 52, on the competitiveness index compiled by Swiss business school IMD, with Hong Kong again top of the table. Venezuela was rooted at the bottom.

SA ranks particularly poorly on employment, where it is bottom of the table, as well as on the quality of its technological infrastructure and health and environment. The country has for the past five years been stuck in the 52 to 53 range on the ranking by the IMD, which uses both hard data and a perception survey of senior management to rank "the extent to which a country allows private entrepreneurs to create sustainable value for citizens".

IMD chief economist and head of operations Christos Cabolis said the ranking on employment was very alarming and some of the institutional issues were also of concern, particularly corruption, transparency and gender inequality.

He pointed to the paradox that SA scored very highly by global standards in its public expenditure on education, where it ranks fourth on the IMD table, but its outcomes were extremely poor. SA comes in 60th on whether its educational system meets the needs of a competitive economy.

Its scores on measures such as higher education achievement are also extremely low.

"How is it possible to have this seeming discontinuity when there is such major investment by the public sector in education?" he asked.

Countries that fare strongly on competitiveness tend to have a very business-friendly environment, but the IMD had noted that SA scored poorly on the time and procedures needed to start up a business.

Cabolis said SA had one of the lowest effective rates of personal income tax and was among the best in private-sector pension provision. It had the lowest cost of living of the countries measured and should be attracting an international talent pool. However, the narrative from the IMD’s data is that personal security fears are an issue in attracting talent, as are SA’s immigration laws and its high risk of political instability.