Singapore and South Korea led other Asian countries in the Global Competitiveness Index, the World Economic Forum said yesterday (Oct 31).
Singapore was 7th while South Korea ranked 11th, making a significant leap from 23rd last year.
The United States ranked first in the index, and Switzerland was placed second. Denmark, Sweden, Germany, Finland, and Singapore followed respectively in the rankings.
The index is released by the Geneva-based WEF in its annual Global Competitiveness Report, which analyses countries' competitiveness in 113 different categories.
Korea, Asia's fourth-largest economy, ranked 16th in infrastructure, eighth in macroeconomics, seventh in technological readiness, and eighth in innovation.
However, the country scored comparatively lower in financial market sophistication, scoring 69th in the financial health of banks, and 45th in investor protection. It also scored poorly in layoff costs, economic costs of malaria and administrative hassles in starting up businesses, scoring 107th, 99th, and 95th, respectively. Korea also fared poorly in the areas of the independence of the judicial circle, 35th, transparency of government policies, 34th, and the sophistication of accounting and auditing standards, 35th.
"There were no large accidents or scandals this year, and the government did not introduce any dramatically restrictive measures this year," said Shin Cheol-ho, a professor at the Seoul School of Integrated Sciences and Technologies. SSIST is the WEF's Korea research partner in making the report on the country.
"It also helped that the free trade agreement with the United States was reached this year. It is expected to benefit Korean corporations," he added.
"The United States was scored as the most competitive among nations, particularly in the areas of capital market efficiency and corporate management sophistication," said Xavier Salai-Martin, the co-author of this report. The United States scored 5.67 out of 7, followed by Switzerland with 5.62. Korea scored 5.4.
"But growing macroeconomic imbalances will weaken (the United States') competitiveness, and it will eventually endanger the world economy. This has been proved by the US subprime mortgage crisis, which was soon followed by a global credit crunch," he added.
The WEF said in the report that "Korea is one of the nations that showed the most improvements since last year."
Korea ranked 18th in 2003, 29th in 2004, 19th in 2005, and 23rd in 2006.
The WEF covers 131 nations in its Global Competitiveness Index, for which more than 11,000 business leaders around the world take the survey. To make the index, the WEF also consults with leading economic research institutes of the countries it covers.
