Geneva, September 28:

Northern Europe and key east Asian countries are the most competitive economies in the world, retaining their positions in the top 10 of a survey released today by the World Economic Forum (WEF). For the third straight year, Finland has the most competitive economy, followed by the United States, according to the annual ‘Global Competitiveness Report.’ Rounding out the top 10 in the poll — expanded this year to include 117 countries — were Sweden, Denmark, Taiwan, Singapore, Iceland, Switzerland, Norway and Australia.

The success of the Nordics is due to their “very healthy macroeconomic environments and public institutions that are highly transparent and efficient, with general agreement within society on the spending priorities to be met in the government budget,” said Augusto Lopez-Claros, chief economist and director of the Geneva-based institute’s global competitiveness programme. Japan slipped to No 12 from No 9 last year as a result of poor management of its public finances, but reforms proposed by prime minister Junichiro Koizumi to privatise the sprawling postal service could help turn things around, the study stated.

China dropped for the second straight year to No 49 from No 44 in 2003, as the survey stated it continues “to suffer from institutional weaknesses which, unless addressed, are likely to slow down their ascension to the top tier of the most competitive economies in the world.” India rose three places to come in just behind at No 50. At the bottom of the list were countries in South America, sub-Saharan Africa, and southeast and central Asia: East Timor, Zimbabwe, Bangladesh, Cameroon, Cambodia, Paraguay, Benin, Guyana, Kyrgyzstan and Chad, which was last for the second straight year.

The aim of the survey, the World Economic Forum (WEF) says, is to examine the range of factors that can affect an economy’s business environment and development as it seeks to maintain economic growth — including the levels of judicial independence, protection of property rights, government favouritism in policy-making and corruption. Lopez-Claros said the Nordic nations were disproving the common belief that high taxes hinder competitiveness. “While the business communities in the Nordic countries point to high tax rates as a potential problem area, there is no evidence that these are adversely affecting the ability of these countries to compete effectively in world markets, or to provide to their respective populations some of the highest standards of living in the world,” he said. “Indeed, the high level of government tax revenue have delivered world-class educational establishments, an extensive safety net, and a highly motivated and skilled labour force.”