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SWAZILAND: GLOBAL COMPETITIVENESS REPORT 2010 2011 By: Fanele Chester Published: 24 April 2011 Background
For the first time in 2010, Swaziland participated in the World Economic Forum Global Competitiveness Report; an annual report has been published for more than three decades. The FSE & CC is a Partner Institute to the World Economic Forums Centre for Global Competitiveness and Performance, one of 150 in the world. As a Partner Institute, FSE & CC administers the Executive Opinion Survey in Swaziland, which is used in the Global Competitiveness Report to calculate the countrys Global Competitiveness Index (GCI). The Global Competitiveness Index (GCI) is a highly comprehensive index for measuring national competitiveness, whereby competitiveness is defined as the set of institutions, policies, and factors that determine the level of productivity of a country. FSE & CC was chosen for our capacity to reach out to business leaders and employers, as well as our understanding of the national business operating environment. The goal of the Report is to provide a benchmarking tool for business leaders and policy makers to identify obstacles to improved competitiveness, thus stimulating discussion on the best strategies and policies for overcoming them.

Twelve Pillars of Economic Competitiveness

There are many determinants driving productivity and competitiveness. The GCI is a weighted average of these determinants, and are grouped into twelve pillars of economic competitiveness, measuring mechanisms such as education and training, investment in physical capital and infrastructure, technological progress, macroeconomic stability, good governance, firm sophistication, and market efficiency, among others. Most of these ideas are not mutually exclusive, and this open-endedness is captured within the Index. Thus, a country report includes both an aggregate index as well as separate measures for each pillar to provide a sense of the specific areas in which a particular country needs to improve. The GCI, in line with the economic theory of the stages of development, assumes three stages: factor driven, efficiency driven and innovation driven. According to the GCI, Swazilands economy is in transition between the factor-driven stage and the efficiency-driven stage.

Executive Opinion Survey

The Survey is a tool for capturing timely and vital information that is not available at a global level. The data collected provides a unique insight and qualitative portrait of each nations economic and business environment, as well as how it compares with the situation in other countries. This years sample scope was 15 000 surveys from 139 economies between January and May 2010. Following editing, 13 607 surveys were retained, which gives an average of 98 respondents per country, including Swaziland.

The World Economic Outlook by the IMF projects 5.5% GDP growth in 2011 for Sub-Saharan Africa, up from 5.0% in 2010. Yet the assessment of competitiveness for African economies raises questions about how sustainable this growth will be over the longer term, particularly middle-income countries, including Swaziland. Swaziland is labeled the Switzerland of Africa; however the irony of the comparison satirizes this label. Switzerland is ranked 1st by the Global Competitiveness Index, labeling it the most competitive country form the survey sample. Swaziland, ranking 126 /139, can only truly become the Switzerland of Africa by making considerable & measurable improvements in its competitiveness. As a transitional economy, it does reasonably well on measures of quality of infrastructure such as quality of railroad infrastructure (35th) and quality of roads (39th), and institutions such as property rights (47th), strength of auditing and reporting standards (44th), efficiency of legal framework in settling disputes (49th) and soundness of banks (44th). Particularly impressive is the countrys female participation in labor force (16th) and rigidity of employment (18th).

3 However, a number of attributes make it one of the least competitive economies in the region, and these weaknesses have to be addressed in order to enhance competitiveness. The poor health situation remains an important obstacle to doing business in Swaziland, ranking 130th overall. A greater concern though is poor factor allocation by the government and private companies to improve the countrys quality of education, technological readiness and innovation. The country ranks poorly in availability of research and training services (137th), company spending on R&D (131st), and overall availability of scientists and engineers (139th) among others. Efforts must be made to improve the quality leadership across the board, both by government (wasteful spending ranked 106th) and private companies (brain drain ranked 137th), to improve on human capital efficiency from primary school level to management level.

The Global Competitiveness aims at capturing the complexity of national competitiveness, by highlighting an array of reforms that improve the long-term productivity of a country. Swaziland in particular can improve its competitiveness through good governance, investment in quality of education, technological adoption, and enhancing innovation potential. Even though economic crises are short-term by nature, caused by business cycles, competitiveness is about the countrys development potential over the medium to long term. It is countries that have competitive strengths in a variety of areas that can exit crises faster and rebound stronger, as their development is based on productivity fundamentals. The GCI is a platform for dialogue amongst government, business and civil society, and it can be used as a catalyst for productivity-improving reforms, and Swaziland is in critical need of these, for the betterment of living standards for all citizens. The Executive Opinion Survey 2011 2012 is currently ongoing via FSE & CC. Business executives are strongly encouraged to participate in the Survey. Please contact Fanele Chester at fsecc@businessswaziland.com or 2404 0768 ext 213 for registration info. Text and images from the WEF Global Competitiveness Report 2010 2011