Canada’s slipping on the world stage, WEF study shows; Switzerland tops competitiveness index
The Globe and Mail
By Heather Scoffield
Canada’s global economic stature is slowly eroding, results from the latest surveys by the World Economic Forum show.
On an index that measures global competitiveness, Canada fell to 16th place, from 13th last year. On a separate business competitiveness index that looks at what countries do to support national prosperity, Canada fell to 15th place, continuing its slide from 11th in 2001.
“It’s a drift and not in a good direction,” said Roger Martin, chairman of the Institute for Competitiveness and Prosperity, the WEF’s Canadian partner in the surveys.
“Canada has got to do a little bit more on setting our sights and benchmarking ourselves internationally, and not just letting stuff happen,” Mr. Martin said in an interview.
Switzerland, Finland and Sweden took the top spots on the global competitiveness index, but last year’s No. 1 — the United States — dropped five places to No. 6. The country’s huge fiscal and trade deficits are an impediment to its overall competitiveness, the WEF said.
However, on the business competitiveness index, which also evaluates a country’s framework to support economic growth but uses different measures than the global index, the United States places first year after year.
This index is the better indication of how a country fares globally because it stresses standard of living, Mr. Martin argues — although the WEF puts more emphasis on the other index.
Regardless, the two indexes deliver a similar message about Canada: The country and its people are rich, but they are not leveraging their wealth to maintain a competitive edge, Mr. Martin said.
“We have managed to be rich without having the underlying economy that would predict that,” he said. Rather, it’s Canada’s proximity to the United States that is the main reason for its wealth.
Still, if small countries with populations under 10 million are left out of the survey, Canada appears to be holding its own, he pointed out. Canada has consistently ranked between sixth and eighth among large countries on the business index, he said.
Canada’s high taxes, its regulated industries and its overly conservative capital-market players are weighing the country down, Mr. Martin added.
The Nordic countries consistently do well on the indexes, noted Augusto Lopez-Claros, chief economist and director of the Global Competitiveness Network.
“The top rankings of Switzerland and the Nordic countries show that good institutions and competent macroeconomic management, coupled with world-class educational attainment and a focus on technology and innovation, are a successful strategy,” he said.
The rankings are compiled using hard economic data and the results of an opinion survey conducted by the WEF, along with research from partner institutes from around the world. This year, more than 11,000 business leaders in 125 countries were polled.
The WEF is based in Geneva, Switzerland.
