SOUTH Africa has failed to improve on its overall competitiveness, with unemployment among young people soaring to 65%. That’s the troubling picture to emerge from a leading global competitiveness study.
In the rankings released by the 2018 Institute for Management Development (IMD) World Competitiveness Yearbook (WCY), South Africa remained rooted at 53 out of the 63 countries surveyed by the IMD. In 2017 South Africa was also rated 53.
The primary challenges that posed a bottleneck for South Africa‘s competitiveness include low economic growth and a steep public debt interest payment. Of the myriad issues that hampered South Africa‘s growth, youth unemployment stood out starkly with unemployment amongst the youth increasing from 50% in 2017 to about 65% in 2018.
The Chief Economist at Productivity SA, Dr Leroi Raputsoane said “the concept of international competitiveness has gained importance in recent decades from the viewpoint of economic growth and development of nations, and as such, one of the key priorities of economic development policy in South Africa should be to foster the country’s productivity and competitiveness in domestic and international markets to attain improved welfare and prosperity for the citizens”.
The WCY ranking is an annual report on the competitiveness of selected countries and is recognised internationally as the leading Executive Opinion Survey of competitiveness between nations. The rankings are drawn from a combination of hard data and an Executive Opinion Survey. Productivity SA is the information partner for the IMD in South Africa.
The IMD World Competitiveness Yearbook (WCY) rates the ability of 63 industrialised and emerging economies to create and maintain an environment that sustains the competitiveness of enterprises. Country data is evaluated through distinct criteria, grouped into four competitiveness factors, namely: government efficiency, business efficiency, economic performance and infrastructure.
In the 2018 results South Africa performed as follows:
Economic performance has declined from 58 in 2017 to 59 in 2018.
- Government efficiency’s performance moved a notch from 50 in 2017 to 49 in 2018.
- Business efficiency’s performance declined from 41 in 2017 to 46 in 2018.
- Infrastructure has recorded a drop from 56 in 2017 to 58 in 2018.
At the top of competitiveness rankings, the USA moved from fourth position in 2017 to be ranked the most competitive economy in 2018. Hong Kong dropped to second position, Singapore maintained third position and Netherlands was ranked fourth with Switzerland placed fifth.
South Africa ‘s counterparts in BRICS have shown slight improvement with India moving from 45 to 44, China showing a significant movement from 18 to 13, Brazil moving from 61 to 60 and Russia from 46 to 45.