Résumé U.S. Economy Ranked First in Global Competitiveness (Finland rated second )

The United States' economy is the world's most competitive due to its "stellar performance" on technology-related factors and a business environment that is conducive to risk-taking and entrepreneurship, according to the World Economic Forum (WEF).

Released November 12, the WEF's "Global Competitiveness Report 2002-2003" gives Finland the number two spot on its "growth competitiveness index," followed by Taiwan, Singapore and Sweden. In last year's report, Finland was ranked first and the United States second.

Published since 1979, the WEF report measures the comparative strengths and weaknesses of 80 economies and offers two index rankings: one covering prospects for growth over the next five to eight years and a second measuring an economy's current productive potential.

The United States held the top position in both indexes for 2002-2003.

WEF Chief Economist Peter Cornelius's executive summary warned against complacency in the United States, however, saying that the U.S. economic recovery "seems rather slow" and that there remains "considerable concern" about a possible "double-dip" recession. Moreover, U.S. corporate and private debts "still appear rather large," Cornelius said.

Other highlights of the report include a "significant strengthening" of the competitive positions of China and India. Argentina and Turkey experienced the largest drop in the rankings since publication of the previous year's report. The report expresses concern over future growth prospects for both Argentina and Turkey and cites "major problems" for those two countries in the areas of public institutions and the macroeconomic environment.

The Geneva-based WEF is an independent international organization that is funded by contributions from some 1,000 global companies and usually holds its annual gathering in Davos, Switzerland, in January. More information on the Global Competitiveness Report is available online at: http://www.weforum.org

• Following is the text of the WEF news release:

Geneva, Switzerland, 12 November 2002 at 14.30 GMT -- The United States is the most competitive economy in the world according to The Global Competitiveness Report 2002-2003 released by the World Economic Forum today.  Despite lingering concerns regarding the prospect of a war, the impact of corporate scandals, and the slow recovery from last year's recession, the World Economic Forum's Global Competitiveness Report indicates that the U.S. economy has the best prospects for growth over the next five to eight years.

This year the United States swaps positions with Finland, last year's top-ranked country.  The United States owes its high competitiveness mainly to its stellar performance in technology-related factors and a business environment that is conducive to entrepreneurship and risk taking.  The U.S. also scores well in its macroeconomic environment, although the country's low savings rate remains a matter of concern.  The Report measures the comparative strengths and weaknesses of 80 national economies.

"The U.S. economy has proven to be remarkably resilient and the fundamentals are in place for sustained growth in the U.S.," said Peter Cornelius, Chief Economist of the World Economic Forum.  "That the United States is ranked number one in both the Growth Competitiveness Index and the Microeconomic Competitiveness Index should not lead to complacency, for to maintain this leading position, the country has to resolve outstanding reform issues, especially the need to improve its governance system, low savings rate and the ballooning trade deficit," he added.

• Some other highlights of The Global Competitiveness Report 2002-2003 are:

-- Japan is moving up in the competitiveness ranking.  Despite deterioration in its macroeconomic environment and public institutions index rankings, Japan's position rises in the overall Growth Competitiveness Index, with technological innovation as the key driver.

-- The rankings show significant strengthening of China and India's competitive positions.  Much of India's gains stem from its performance in the technology and macroeconomic environment indexes, while China derives much of its ascent from gains in the public institutions index.

-- Crisis countries, Argentina and Turkey, have experienced the largest drop in this year's Growth Competitiveness Index rankings.  Future growth prospects of both countries look particularly concerning because the declines were not only due to lower macroeconomic environment scores; that both countries' positions in the public institutions index also dropped does not augur well for their prospects of immediate recovery.

-- There is a wide divergence of performance among the European countries, with Sweden and Switzerland rising to the 4th and 5th positions from last year's rankings of 9th and 15th, respectively; while France and Italy fall to 30th and 39th positions from last year's rankings of 20th and 26th, respectively.

The biggest changes have been experienced by Switzerland, having climbed from 15th to 6th place in the Growth Competitiveness Index (GCI) thanks to a dramatic improvement of their technology.  Turkey, on the other hand, has the worst performance in this year's Report, slipping by 16 spots, dragged down primarily by a worsening performance in public institutions.  Regarding technology performance, Israel shows surprisingly the greatest improvement going up 19 places from 26th to 7th, while New Zealand has experienced the hardest fall -- 16 places.  The worst performers in the macroeconomic environment were Brazil and Argentina, dropping 34 and 25 places respectively.  India shows the best increase in macroeconomic performance along with the Russian Federation.

"In view of the fragility of global economic recovery, it is more important than ever to assess the growth prospects of countries," said Professor Klaus Schwab, Founder and President of the World Economic Forum.  "For the recovery to be strengthened and sustained, obstacles to growth must be identified and overcome and, to this end, The Global Competitiveness Report is intended to be a benchmarking tool for policy-makers as they seek to improve the conditions of growth and competitiveness."

A more detailed version of this press release is available on our website at http://www.weforum.org/mediacentre

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