8 September 2012
The World Economic Forum released its annual Global Competitiveness Report on Wednesday (September 5th), listing Turkey as having the most competitive economy in Southeast Europe.
The 545-page survey covers 144 economies this year, including all of the Southeast European nations, except Kosovo. The surveyed countries are ranked in WEF's Global Competitiveness Index (GCI) on the basis of the scores they have received on each of over 100 indicators, grouped into 12 pillars.
They include institutions, infrastructure, macro-economic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication and innovation.
An economic growth of 8.4 percent in 2011, improved macroeconomic stability, a more trustworthy financial sector and businesses' easier access to finance were cited as some of the factors that allowed Turkey to leapfrog 16 places in the GCI.
"Turkey's vibrant business sector derives important efficiency gains from its large domestic market (ranked 15th), which is characterised by intense local competition (16th)," the report noted.
With an overall score of 4.45 of a possible 7, the country of more than 70 million people jumped to the 43rd slot in the global table, overtaking Cyprus to become the most competitive economy in the region.
"The results of this index once again show that Turkish economy is gradually becoming a source of inspiration for the rest of the world in the midst of a continuing financial turmoil," Professor Turkan Dagoglu, deputy from the ruling Justice and Development Party (AKP), told SETimes.
"This year, Turkey reached the lowest rate of unemployment since a decade; but it is necessary to orient this population toward being a qualified human capital active in competitive sectors such as aerospace or renewable energies."
Dagoglu also noted the need for Turkey to show better results in the area of health infrastructure and access to health facilities to be able to further improve its ranking.
Turkey was among four Southeast European nations that improved their rankings in this year's GCI. Bulgaria and Bosnia and Herzegovina (BiH) climbed 12 places each to the 62nd and the 88th, respectively, while Moldova moved up six slots to the 87th.
Bulgarian Energy, Economy and Tourism Minister Delyan Dobrev told Sofia-based Nova TV that the ranking is "very important, as it will instill a greater confidence among foreign investors". Bulgaria ranked best (31st) on the "macro-economic environment" pillar and worst (108th) on the "institutions" one.
Serbia, ranked 95th, was the only regional nation covered in this year's report to retain its position.
According to Vlajko Senic, secretary of state at the Serbian ministry of finance and economy, the government is envisioning some important systemic measures to improve the economic situation in the country.
"We have identified the five most problematic areas for 'doing business' and we'll make the most progress in that," he told SETimes.
A reduction of public administration and simplification of the procedures for domestic and foreign investors, as well as steps to bring the budget deficit to below 4 percent of GDP, a new Foreign Exchange Act and modernisation of the tax administration are some of the steps on the agenda, he said.
"We are abolishing a number of different para-payments and procedures, and it will simplify and reduce the costs of doing business in Serbia," said Senic.
Aside from Greece, which slipped six places to the 96th in the new GCI, Romania and Macedonia dropped one slot each to the 78th and the 80th spots, respectively. Croatia moved into the 81st, down from the 76th last year, while Cyprus and Albania sank 11 positions to the 58th and 89th, respectively. Montenegro showed the biggest decline after falling 12 places to the 72nd.
The Macedonian government was pleased with the results, since the country managed to maintain its level of competitiveness even in times of crisis. In the 2011 GCI, the country was ranked 79th, but this year the Seychelles Islands, one of the two new economies included in the report, was ranked higher than Macedonia.
"Positive effects to maintain this trend were caused mainly by activities and projects proposed and run by the government. If the other indicators, that are more influenced by the companies, did not register such a fall, it would be realistic to hope to be second most competitive economy in the region after Slovenia," said Vladimir Peshevski, the government vice president in charge of economic issues, in a reference to the six former Yugoslav republics.
"But, still we should be pleased with the results because they show more organised approach in improving the country's competitiveness."
Florin Citu, a Romanian economic analyst and owner of a consulting company, said his country's 78th position in the new GCI "synthesizes in a single figure all the problems of Romania's economy -- corruption, over-taxation and a poorly protected right of property -- problems also signalled by foreign investors over time and mentioned in reports done by either the European Commission or the IMF."
"It confirms what we cope with in reality," he told SETimes. "All these problems have made Romania regress in WEF competitivity top over the past years. Unfortunately, in Bucharest, it is only looked at but not heeded, other than for electoral purposes."