The US still has the world’s most competitive economy, despite the turmoil that has seen some Wall Street giants tumble and others turn to the Federal Reserve for financial bailouts, a survey released yesterday found.
In a poll of more than 12,000 business figures conducted by the Geneva-based World Economic Forum, the US ranked first, ahead of Switzerland, Denmark, Sweden and Singapore.
Finland came in sixth in the poll, while Germany slipped two places to seventh because of worsening business confidence in Europe’s biggest economy.
The Netherlands, Japan and Canada rounded off the top 10.
Britain, which came ninth last year, slipped down three spaces because of growing public debt and low national savings compared with other major economies.
Researchers defended the survey’s accuracy despite the fact that it was conducted before the US government announced a US$700 billion rescue package to save ailing financial companies from collapse.
“In the context of the current crisis the index rather measures the ability of economies to limit the impact of the shock waves on the real economy and to bounce back quickly based on sound economic fundamentals,” said Margareta Drzeniek Hanouz, one of the authors of the report.
“As the crisis spills over into the real economy, we may see a weakening of the assessment in some categories over the next year or two, in particular with respect to macroeconomic stability or public institutions, but this remains to be seen,” she said.
The World Economic Forum, which hosts the annual Davos pow-wow of business and political leaders, said in the report that US is well placed to rebound from the financial crisis because of its inherent competitive advantages.
Pollsters asked business figures to rate 134 countries according to factors that promote economic growth. These included government transparency and fiscal responsibility; transport and telecommunications infrastructure; openness to innovation; intellectual property protection; and the ready availability of talent.
China continued to climb this year, up four places to 30, helped by its large market and strong economic performance, but held back by underdeveloped financial markets, the report said.
Russia also rose sharply, climbing seven places to 51, its big market and oil-fueled economic performance outweighing institutional weaknesses.
Brazil also rose sharply. But among other big emerging economies, India slipped two places to rank 50 with economic problems and unequal access to health and education outweighing the size of its markets and its business sophistication.
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