Friday, September 30, 2016

Nepal's competitiveness eroding

Though Nepal has improved its competitiveness by a notch, it has lost its rank as the third most competitive economy in South Asia, according to Global Competitiveness Report 2016-17 published by World Economic Forum (WEF).
Nepal scored 3.87 points and ranked 98th among 138 economies in the world, reveals the Global Competitiveness Index (GCI). The country was at the 100th position among 140 countries last year.
In South Asia, India leads the chart with global ranking of 39, followed by Sri Lanka (71) and Bhutan (97), whereas Nepal slipped to fourth most competitive economy from last year's third most competitive economy. The GCI has ranked Bangladesh and Pakistan at 106th and 122nd position, respectively.
However, the country boasts the best macroeconomic environment in South Asia, and after significant recent improvement, the second highest level of health and primary education, according to the report.
But Nepal is the worst performer in terms of infrastructure. "The quality of infrastructure in Nepal has stalled," the report added.
Nepal is still under the factor-driven economies or Stage 1, which has 35 countries.
There are three sub-indices in the competitiveness report; Basic Requirements, Efficiency Enhancers, and Innovation and Sophistication factors. Nepal is ranked 98th in both Basic Requirements and Efficiency Enhancers sub-indices, while it is at the 127th position in Innovation and Sophistication sub-index.
Likewise, there are 12 pillars under the three sub-indices. Under Basic Requirements sub-index, Nepal ranks 100th with a score of 3.50 in Institutions, 130th in Infrastructure with a score of 2.16, 27th in macroeconomic environment with a score of 5.54, and 82nd in Health and Primary Education pillar scoring 5.56.
Similarly, under Efficiency Enhancer sub-index, Nepal ranks 113th with a score of 3.26 in Higher Education and Trainings, 116th with 3.90 score in Goods Market Efficiency, 103rd with 3.86 score in Labour Market Efficiency, 73rd with 3.91 score in Financial Market Development, 126th with 2.56 score in Technological Readiness, and 91st with 3.24 score in Market Size pillars, according to the report.
"Among 138 economies, Nepal ranks 124th with 3.25 score in Business Sophistication and 126th with 2.63 score in Innovation pillar under the Innovation and Sophistication sub-index," it added.
In the Global Competitiveness Report 2015-2016, Nepal was ranked 100th, with a score of 3.9, among 140 economies in the world. Likewise, with a score of 3.8, Nepal was ranked 102nd in the Global Competitiveness Report 2014-2015, among 144 economies.
The report also highlighted government instability, inadequate supply of infrastructure, corruption, inefficient government bureaucracy and policy instability as the most problematic factors in doing business in Nepal.
According to the report, Switzerland is the most competitive economy, followed by Singapore and United States.

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