India gets more competitive

Vibrant financial markets and a sound banking sector have helped the Indian economy move up a notch to the 49th place on the global competitive scale.

Vibrant financial markets and a sound banking sector have helped the Indian economy move up a notch to the 49th place on the global competitive scale,while Switzerland has toppled the US as the top-ranked nation,the World Economic Forum said on Tuesday in its annual ranking of the worlds most competitive economies.

Reversed development pattern

Indias competitive performance continues to exhibit a rather reversed development pattern. It ranks an outstanding 28th in the most complex areas measured by the business sophistication and innovation subindex,ahead of several advanced economies. The country also boasts of fairly well functioning institutions (54th),bustling financial markets (16th),and a sound banking sector (25th) supported by a vast domestic market (4th largest in PPP terms). However,the country underperforms on some of the basic determinants of competitiveness,namely health and primary education (101st),macroeconomic stability (96th) though improving and infrastructure (76th). In addition,penetration rates for mobile telephony (116th),the Internet (104th),and personal computers (96th) remain among the lowest in the world,while inefficiencies in the labour market (83rd) prevent an optimal allocation of human capital. Improvements in these areas would place India on a stronger growth trajectory going into the future.

US is among the most unstable

The US,other than conceding its overall 1st rank to Switzerland,is now placed 93rd among the 133 countries in terms of macroeconomic stability. The financial crisis has accentuated the USs weakness as one of the most economically unstable nations. Repeated fiscal deficits have led to burgeoning levels of public indebtedness,which are presently being exacerbated by significant stimulus spending, the WEF said. Widening government budget deficit and low national savings rates helped drag the US down. The country also scored badly for the soundness of its banks,in 108th place,just ahead of Venezuela,Serbia and Vietnam.

Brazil shines while Russia topples

Among emerging economies,Brazil,at 56th,continues the impressive upward evolution it started last year,gaining another eight positions,overcoming Russia for the first time,and partially closing the competitiveness gap with India and China among the BRIC economies. Russia saw one of the steepest declines among the 133 countries assessed,falling back 12 places to 63,as worries about government efficiency and judicial independence rose.