The government's low priority in infrastructure development — that is directly related to productivity — has made the country less competitive.
"Weak infrastructure has made Nepal less competitive among the 144 global economies, and the country ranked 125 with a score of 3.5 in the Global Competitiveness Report 2012-13," according to a report of the World Economic Forum released globally today.
Last year, Nepal ranked 125 among 142 economies, and this year too, it is ranked 125 among 144 economies, said country coordinator of the report Prof Dr Ramesh Chitrakar.
The country scored worst in infrastructure — one among the 12 pillars that gauge the country's competitive strength — with a score of 1.8, ranking at 143, second from the bottom. "Under infrastructure, there are nine components — quality of overall infrastructure, roads, railroad infrastructure, port infrastructure, air transport infrastructure, airlines seat kms/week, electricity supply, mobile telephone subscription, and fixed telephone lines/100 people — and Nepal's score was not satisfactory in any of them," he said, adding its performance was poor in the quality of electricity supply, ranking at 143 position.
Nepal could neither perform well in basic infrastructure nor in the efficiency enhancer as the country is lacking in making the right mix of goods and services for its exports, and availability of financial services is still difficult despite the rising number of banks and financial institutions.
But Nepal fared well in the macroeconomic environment, and health and primary education that has helped the country retain the same rank this year too.
Among the four pillars under 'Basic Requirements', two — institutions (rank 123) and infrastructure (rank 143) — performed poorly and two — macroeconomic environment (rank 56) and health and primary education (rank 109) — are satisfactory.
However, among the six pillars under 'Efficiency Enhancers', all of them — higher education and training, goods market efficiency, labour market efficiency, financial market development, technology readiness and market size — performed poorly.
Similarly, the country could not improve in 'Innovation and Sophistication Factors' that has two pillars –– business sophistication and innovation.
As Nepal falls under the factor driven economy, basic requirements gets 60 per cent, efficiency enhancers gets 35 per cent, and innovation and sophistication factors gets five per cent weightage in the overall scoring, said Chitrakar.
He added that there are three categories — factor driven economy like Nepal, efficiency driven country and innovation driven country — based on their per capital, exports of goods, innovation and market efficiency, according to the Global Competitiveness Report.
The report revealed Switzerland as the most competitive country for the fourth consecutive year, this year too. Singapore remains in the second position, whereas Finland improved to become third overtaking Sweden.
The US continued to decline for the fourth year in a row falling two places to seventh position, though it still remains a strong global innovation powerhouse, and its markets work efficiently.
The study by the World Economic Forum ranked 144 countries by examining 113 indicators culled from official data sources and a poll of 15,000 executives who opined on the country where they do business.
South Asian ranking
India — 59
Sri Lanka — 68
Bangladesh — 118
Pakistan — 124
Nepal — 125
Hong Kong SAR
Sierra Leone (143)