The World Economic Forum has upgraded Sri Lanka’s global competitiveness ranking from 79th to 62nd place among 139 nations for the year 2010-2011. Sri Lanka showed a remarkable improvement of 17 places.

 

 

Mongolia, ranked 99th in the latest report, was the highest gainer climbing 18 positions, followed by Sri Lanka, which gained 17 positions to be 62nd. Other significant improvements were in the case of Indonesia(44th), Vietnam (59th) and Tunisia(32nd).

Sri Lanka’s rise attributable to improvements across the board. Between 2003 and 2008, annual GDP growth exceeded 5 percent (slowing to 3.5 percent in 2009). As a result of this healthy growth, Sri Lanka’s GDP is rising and the country is now transitioning from the factor-driven to the efficiency-driven stage in the GCI framework. Sri Lankaneeds to bolster the foundations of its competitiveness, while improving on efficiency-enhancing factors, which are becoming increasingly important given this level of development. And this year’s performance indicates that the country is making some important improvements to this end.

 

 

Sri Lankaachieves higher scores this year in every measure of the public institutions category, improving its position from 73rd to 55th in the institutions pillar. Among other things, the perceived level of security is increasing (106th), although threat of terrorism remains a serious concern (134th). Other areas of improvement include health and primary education (35th, up 12) and financial markets (52nd, up 13). Sri Lanka also continues to benefit from impressive business sophistication (39th) and innovation (40th), particularly for a country at its stage of development. Against this largely positive background, three notable areas of weakness persist. The macroeconomic environment has worsened considerably, with debt and deficits going up, the savings rate declining, and a poor credit rating (111th). The labor market is another area of major concern (104th), crippled by rigidities and high redundancy costs. Finally, ICT use remains low (101st), indicating that these tools are not yet being sufficiently employed for productivity enhancements in the country, the Report adds.

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