Vietnam leap up global competitiveness list

The World Economic Forum's latest global competitiveness list presents a mixed picture for Asia, with big gains by Indonesia and Vietnam and demotions for the likes of Japan and India.

The Global Competitiveness Report 2017-2018, released on Wednesday, ranks Indonesia 36th overall, up from 41st last year. The Southeast Asian country improved in 10 of 12 "pillar" categories, including health, primary education and infrastructure. And though it did not move up in the innovation category, the report praises the country as "one of the top innovators among the emerging economies," ranking it 12th in government procurement of advanced technology products.

Indonesia has had its ups and downs in recent years, but compared with five years ago, it has climbed 14 places. This is largely thanks to its growing economy, which ranks eighth on the domestic market size index.

The country still needs to enhance labor market efficiency, the Geneva-based WEF notes in the report. Here, Indonesia is ranked 96th, as it "is dragged down by excessive redundancy costs, limited flexibility of wage determination, and a limited representation of women in the labor force."

Vietnam, meanwhile, jumped into 55th place, up five rungs from last year and 20 places from five years ago.

The country made notable improvements in technological readiness and labor market efficiency. Trade is another big factor propelling Vietnam upward: It now ranks seventh in terms of the ratio of imports to gross domestic product, and 11th by the ratio of exports.

The U.S. withdrawal from the Trans Pacific Partnership may have eliminated some future trade opportunities for Vietnam, but the report suggests "the country's growth is nonetheless projected to remain robust from strong exports."

Other Asian winners include Malaysia, in 23rd place; China, in 27th; and Thailand, in 32nd. Each moved up a peg or two. The Philippines also rose one spot, to 56th.

Japan is headed in the opposite direction: It now ranks ninth after falling for the second year in a row.

The world's third-largest economy continues to perform well in categories like infrastructure, health and primary education, but it is struggling on the macroeconomic environment front due to massive public debt.

Source: Nikkei Asian Review

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