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Argentina falls in world competitiveness ranking

Argentina falls in world competitiveness ranking
Argentina falls in world competitiveness ranking

One of the main challenges that governments faced in recent decades was to make the Argentine economy efficient and competitive again. There have been several attempts since the ’80s, some with ephemeral successes, but after several failed experiments the current Government has no choice but to face this challenge if it aspires to reposition the economy on the path of sustained growth. But where does it start from? In addition to the diagnosis, almost consensus, perhaps not so the prescription. The truth is that the last one has just been known World Competitiveness Ranking (WCR) from the prestigious International Institute for Management Development (IMD) in Switzerland, where Argentina fell to 66th place, the worst position since 2020.

The WCR has been prepared annually since the mid-1980s through a detailed methodology of analysis of economic and social indicators centered on four main factors of the national environment (Economic Performance, Government Efficiency, Business Efficiency and Infrastructure). In turn, each one is divided into 5 sub-factors that highlight each facet of the areas analyzed (the ranking presents 20 of these sub-factors that comprise 336 criteria). In the Argentine case, it shows that during the 2020 and 2022 editions it was ranked 62nd, falling to 63rd during 2021 and 2023, and now it falls to 66th place. with a score of 35.89 points, the lowest in the ranking only above the last, Venezuela. It is worth noting that The ranking includes 67 countries in total.

“This year it is observed that Argentina only maintains the score in the infrastructure factorwith the sub-indicators of basic infrastructure, scientific infrastructure and education in which it improves some positions,” they explain from the IMD.

While regarding economic performanceanother of the four major factors analyzed, drops three positions and it now occupies position 62, and among the sub-indicators in which it scores best are international investment (from 59 to 54) and employment (from 49 to 34). It also obtains worse results in business and government efficiency indicators, with public finances (65th), business legislation (66th) and the institutional framework (66th) as main weaknesses.

“Among the main challenges for the Argentine economy is the need to support economic stability and improve the investment climate. through greater political and social cohesion, foster competition and price stability in the main sectors and reinforce the independence of the Central Bank, as well as liberalize exchange rate regulations to eliminate the current segmentation of the foreign exchange market,” says the Swiss entity.

Among their peers in the region, The best positioned is Chile, which occupies 44th place. worldwide with a score of 59.71 points, followed by Colombia with 47.37; Brazil 43.77; Peru 43.44 and Argentina and Venezuela close. On the continent, the leader is the USA with 83.48 points and then Canada with 77.69 points, ranking 12th and 19th in the world, respectively.

Singapore, Switzerland and Denmark in the top 3

When looking at who are the leaders in the world ranking, it is seen that small economies prosper since Singapore, Switzerland and Denmark occupy the top three positions in the 2024 IMD WCR.

“Singapore consolidates itself as the most competitive economy and recovers the position it already had in 2020, thanks to its good results in the four competitiveness factors, especially in government efficiency and business efficiency, reflecting the solidity of the public and private sectors” , explains the IMD.

While in the Swiss case it stands out that progress is due to the improvement of its economic results and business efficiency, as well as its continuous leadership in government efficiency and infrastructure; and in Denmark, its fall to third place is explained by a drop in its economic results.

In view of the results, Arturo Bris, director of the IMD World Competitiveness Center, noted that they believed that the most competitive economies of the future will be those capable of anticipating and adapting to this changing global context, while creating value and well-being for its citizens, which will also make them sustainable. In this sense, he highlighted that Among the main challenges in terms of competitiveness are the transition to a circular and low-carbon economy, the growing integration of emerging markets into the global economy and the pace of digital transformation.

The Top Ten of the WCR 2024 is completed with Ireland (4th), Hong Kong SAR (5th) and Sweden rising two places to 6th position, ahead of the United Arab Emirates (7th), Taiwan (8th) followed by the Netherlands and Norway.

Emerging: improvements, risks and uncertainties

Another distinctive feature that the WCR 2024 brought was that emerging economies are closing the gap, since the classification shows them catching up with the most advanced economies, especially in the areas of innovation, digitalization and diversification.

“Countries like China, India, Brazil, Indonesia and Türkiye They have experienced rapid growth and development in recent decades and have become essential players in trade, investment, innovation and geopolitics. For its part, Malaysia, Thailand and Chile They are also stable or improving. These countries offer new opportunities and markets for businesses and consumers, but they also pose new risks and uncertainties.”says the report.

According to the study, governments and companies around the world must adapt to the different cultural, institutional and regulatory environments of these markets to be successful in them, while respecting global standards for quality and sustainability.

In this edition, Ghana, Nigeria and Puerto Rico joined. Regarding the inclusion of African countries, the authors of the study point out that the classification helps attract investment, inform political decisions and foster a competitive spirit among nations.

Source: Ambito

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