CAIRO: Egypt slid to number 94 in the 2011-12 Global Competitiveness Report, falling 13 places from last year.
Egypt came in at 94 out 142 countries, receiving a 3.9 rating on a scale of one to seven, while last year it ranked in 81 out of 139 with a score of four. In 2009-10 it ranked 70.
The World Economic Forum’s annual report is based on the Global Competitiveness Index, which measures the economic competitiveness of some of the world’s largest markets.
The most problematic factors for doing business in Egypt include an inadequately educated workforce, inefficient government bureaucracy, restrictive labor regulations and tax regulations.
Switzerland topped the list for the third consecutive year, with a 5.7 score.
The US was number five, falling one spot from last year. It’s most difficult factor for doing business proved to be tax rates, according to the report.
Sub-Sahara African countries are among the least competitive this year, faring worse than they did in last year’s GCI report.
Chad’s economy for example, ranked at 142 as the least competitive among the listed countries while Nigeria was at 127 and Mauritania at 137.
The GCI report measured countries based on 12 different pillars including institutions, education and training, labor market efficiency, infrastructure and technological readiness.
Egypt’s basic requirements — which include an overview of the performance of institutions, infrastructure, macroeconomic environment, and health and primary education — ranked 99 while the macroeconomic environment alone was at 132.
“Efficiency enhancers,” which was the umbrella for higher education and training, goods market efficiency, labor market efficiency, financial market development, technological readiness and market size had an overall ranking of 94.
Labor market efficiency in the country stood at 141, while higher education and training ranked 107.
The best performing indicator in the category was market size, which ranked 27 as Egypt, the largest country in the Arab world, enjoys a rather large market.
With an estimated population of 84.5 million citizens and a diverse economy, the report shows Egypt’s GDP has been steadily rising over the decades. In 2010, the country saw about a GDP of $218.5 billion.
This year, however, according to economic experts, the outlook was predicted to be negative or low due to the political instability that hit the country’s economy after the revolution.
Ripple effects of the uprising caused a plummet in the country’s tourism and foreign direct investments, two of the most important components of the country’s diverse market.
In fact, over the previous three months, there was -4.2 percent decline in the economy’s growth, according to Reuters. However, in year to June, the economy saw 1.8 percent growth
The report also analyzes the reasons behind each ranking, listing the number one “problematic factor” for the country’s economy as policy instability.
Furthermore, the second was an inadequately educated workforce, and the third is access to financing, while the fourth top reason was inefficient government bureaucracy.
The fifth most problematic factor contributing to Egypt’s low rank was restrictive labor regulations, while the sixth was corruption.
All of these components were contributing factors sparking January 25 Revolution, which ousted former president Hosni Mubarak. People took to the streets in mass demanding democracy, equal opportunities and dignity, as well as an end to corruption.
Regional comparisons
Tunisia, who also saw a popular uprising that forced its leader who ruled for 23 years out of power, ranked 40.
The report showed that Tunisia’s most problematic factors for doing business respectively are inefficient government bureaucracy, access to financing, government instability/coups, policy instability, and restrictive labor regulations, inadequate supply of infrastructure, as well as corruption.
Unlike Egypt, however, Tunisia’s inadequately educated workforce is not as high.
GCC countries in the Middle East including Saudi Arabia, United Arab Emirates, as well as Qatar were among the top ranking nations.
Saudi Arabia came in at 17; UAE was 27, while Qatar ranked at number 14.
Unlike any other year, this year’s report comes out at a time of “re-emerging uncertainty in the global economy.”
In fact, this year broke all expectations for many, including the International Monetary Fund’s (IMF) economic forecast.
“At the beginning of the year, world wide recovery appeared fairly certain, with economic growth for 2011 and 2012 projected by the International Monetary Fund (IMF) at 4.3 percent and 4.5 percent,” the report read.
“However, the middle of the year saw uncertainties regarding the future economic outlook re-emerge, as growth figures for many economies had to be adjusted downward and the political wrangling in the United States and Europe undermined confidence in the ability of governments to take the necessary steps to restore growth.”
Withstanding the global economic slump, northern and western countries in the European Union including Finland, Sweden, and the Netherlands all ranked in the top 10 as most competitive markets.
