Though, the lengthening political transition has dampened the hopes of investors, the country has improved its competitive raking.
Nepal has improved its global competitiveness ranking to 117th position – with a score of 3.66 out of seven – out of 148 economies, the according to the Global Competitiveness Index 2013-14 (GCI) published today by World Economic Forum (WEF).
Lat year the country was ranked 125th among the 144 economies. Compared to the last year’s economies only that 144, Nepal ranks 114 this year, revealed the Global Competitiveness Index (GCI) – also a barometer for the investors to gauge the investment climate of individual countries – that is measured on 12 categories of economic competitiveness.
The ranking calculated on the basis of 12 categories – institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication and innovation – are further divided into 112 sub-indicators to map the competitiveness of a country.
Nepal has improved only in three – macroeconomic environment, health and primary education and financial market development – of the 12 pillars.
The improvement in the three pillars will however not help sustain the competitiveness ranking without visible improvements in key sectors like infrastructure, labour market efficiency, technological readiness and business sophistication and innovation.
Of the 148 economies, Nepal ranks 144th in infrastructure, whereas it is ranked 146th in cooperation in labour-employer relations under the labour market efficiency pillar.
Likewise, the country ranks 125th in hiring and firing practices, down from last year’s 105th as the government-labour organisations and private sector are still not able to agree on hire and fire opposed by the hardliner communists political parties.
The global report has also identified government instability as one of the most problematic factors for doing business in Nepal, followed by corruption and inefficient government bureaucracy.
Similarly, the GCI also revealed that public trust in the politicians is at its lowest as the country ranks 142nd in public trust of politicians.
The index also revealed government spending as one of the waste as Nepal is in the 105th position in the wastefulness in government spending.
As always, the private sector still feels legal framework for settling business disputes insufficient and worsened, as the country is positioned at 123rd in the efficiency of the legal framework in settling disputes from last year’s 113 last year.
The report revealed that India (60), Sri Lanka (65), Bhutan (109) and Bangladesh (110) are more competitive economies – than Nepal – in South Asia, whereas Pakistan (133) trails behind Nepal.
Likewise, Switzerland with 5.67 score is the world's most competitive country, according to WEF Global Competitiveness Report 2013-14, followed by Singapore (5.61), Finland (5.54), Germany (5.51), and US (5.48).
The report also revealed that the US was able to reverse its four-year downward trend, rising by two positions to take fifth place this year overtaking the Netherlands and Sweden.
China is ranked 29th, leading the five BRICS – Brazil, Russia, India China and South Africa – economies, whereas Chad (148), Guinea (147), and Burundi (146) are the least competitive economies among the 148 listed in the index represents a comprehensive tool that measures the micro-economic and macro-economic foundations of national competitiveness.