South Africa’s world competitiveness improves amid the global geopolitical tensions


South Africa’s international competitiveness ranking improved to 60 in 2022 from 62 in 2021. The latest improvement in the World competitiveness ranking flows from 4 consecutive years of decline since 2018. This is according to the latest World Competitiveness Yearbook (WCY) by the Swiss-based Institute of Management Development (IMD).

The IMD WCY is an annual report that ranks the international competitiveness of selected countries, 64 in 2021 and 63 in 2022. The IMD WCY is recognised internationally as the leading Survey of competitiveness between nations. The rankings are drawn from a combination of Hard data and an Executive Opinion Survey. Productivity SA is the information partner institute for the IMD in South Africa. Productivity SA is an entity of the Department of Employment and Labour (DEL) and is also responsible for employment preservation and creation.

The current geopolitical tensions as a result of the war in Ukraine have resulted in Russia and Ukraine not being included as part of the IMD World Competitiveness rankings in 2022. Although it has helped South Africa’s World Competitiveness ranking, the war in Ukraine has had global spill overs that continue to be felt far and wide resulting in an extraordinary toll on lives and livelihoods. As far as the international competitiveness of countries is concerned, the scale and duration of disruptions have affected government policies and business responses as well as adversely affected consumers worldwide. The IMD WCY evaluates each country’s data based on about 346 distinct criteria, which are grouped into 4 factors, where South Africa performed as follows among the 63 selected countries.

• Economic performance (59th)
• Government efficiency (53rd)
• Business efficiency (56th)
• Infrastructure (60th)

The IMD WCY shows that, in 2022, the following countries topped the global competitiveness rankings
• Denmark (1st)
• Switzerland (2nd)
• Singapore (3rd)
• Sweden (4th)
• Hong Kong (5th) The IMD WCY further shows that, in 2022, the following countries BRICS countries performed as follows
• Brazil (59th)
• Russia ( - th )
• India (37th)
• China (17th)
• South Africa (60th)

According to the IMD WCY, the fall in South Africa’s global competitiveness ranking was underpinned by the following challenges
• High headline and youth unemployment
• High public debt levels amid a shrinking fiscal space
• Ongoing electricity supply problems and rolling blackouts
• Lack of decisive plans to address socio-economic challenges
• Sluggish process to address State Capture Commission Recommendations

In a recent book, “The Right Place: How National Competitiveness Makes or Breaks Companies,” July 2021, Professor Arturo Bris, IMD, argues that enterprises succeed in one country and fail in another irrespective of their systemic drivers. He asserts that the typical mistakes that countries make are revealed in the pillars necessary that build a competitive economy such as economic performance, government efficiency, business efficiency and infrastructure.

Chief Economist Leroi Raputsoane, Productivity SA, further argues that, although the current improvement in South Africa’s international competitiveness is welcome, it is largely attributed to the current geopolitical tensions that have resulted in Russia and Ukraine not being included as part of the IMD World Competitiveness rankings in 2022. Thus, Government and the Business community should continue to exploit South Africa’s competencies to achieve long term value creation the citizens.

ENDS
To organise interviews or receive more information, please contact Productivity SA media liaison office, Maupi Monyemangene, on 0824473232 or send an e mail to: maupim@productivitysa.co.za or Chief Economist at Productivity SA, Dr Leroi Raputsoane on (011) 848 5333

Issued by: Productivity SA