Ranking: Bhutan has jumped eight places in the World Economic Forum’s global competitiveness ranking to the third most competitive economy among the SAARC countries.
According to Global Competitiveness Report 2016-17, Bhutan scored 3.87 points and ranks 97th among 138 economies surveyed by the Global Competitiveness Index (GCI). Last year, the country ranked 105 among 140 economies.
The global competitiveness index measured by the World Economic Forum (WEF) assesses the competitiveness of economies, providing insight into the drivers of their productivity and prosperity. It also measures how easy it is to set up businesses in an economy.
From the list of factors, respondents to the World Economic Forum’s Executive Opinion Survey were asked to rate problematic factors for doing business in Bhutan. Most of the respondents pointed “access to financing” as the most problematic factor in doing business, followed by “restrictive labour regulations” and “inadequate supply of infrastructure”.
There are three sub-indices in the competitiveness report—basic requirements, efficiency enhancers, and innovation and sophistication factors. Bhutan is ranked 90th in basic requirements and 108th in efficiency enhancers sub-indices, while it is at the 94th position in the innovation and sophistication sub-index.
Infrastructure and connectivity are bottlenecks for both economies but thanks to heavy investments in hydroelectric power, Bhutan can rely on a high-quality electricity supply, states the report.
India leads the group of South Asian economies, climbing to 39th with improvements across the board, including institutions and infrastructure. Sri Lanka (71) and Nepal (98) rank as the second and fourth most competitive economies in the region, respectively.
The GCI has ranked Bangladesh and Pakistan at the 106th and 122nd positions, respectively.
According to the report, South Asia continues its upward trend and competitiveness improves in most economies in the region, which is experiencing positive economic momentum. In 2016, the region is set to grow more quickly than China for the first time in more than 20 years.
In the health and primary education and the infrastructure pillars, South Asia’s average score has increased by 0.5 and 0.3 respectively since 2007, but infrastructure remains the region’s second weakest pillar, just after technological readiness. Investment in these areas will be vital to fully unlock economic growth, according to the report.
The most advanced economy in the region, Sri Lanka, slipped three positions to 71st.
Pakistan trails the group of South Asian economies. Its upward trend of recent years continues with an advance of four places to 122nd. The climate of instability during this period has surely weighed down the country’s economic development.
MB Subba