Competitiveness of Central Asia

Global Competitiveness Report Key Features

Enables for cross country comparison of 139 economies Produced in collaboration with leading academics and research institutes worldwide Includes comprehensive dataset on competitiveness.

Data sources are:

A) The Executive Opinion Survey:

Qualitative data capturing the perspectives of business leaders around the world Respondents ccompare their national operating environment with international standards on a wide range of dimensions.
B) Other data available from international sources and data partners:

Quantitative measures comparable across countries. Some of the international sources used are the World Bank, the International Monetary Fund, UNESCO, ITU.

What we try to measure: Different growth paths

GDP per capita (PPP) - evolution over the past 30 years
30,000

25,000

GDP per capita (PPP)

20,000

15,000

10,000

5,000

China

Korea

Nigeria

Definition of competitiveness
How we define competitiveness: The set of institutions, policies, and factors that determine the level of productivity of a country The level of productivity, in turn, sets the sustainable level of prosperity that can be earned by an economy.

The Global Competitiveness Index

The 12 pillars of competitiveness
BASIC REQUIREMENTS

1. 2. 3. 4.

Institutions Infrastructure Macroeconomic stability

Health and primary education

Key for

factor-driven
economies

EFFICIENCY ENHANCERS

5. 6. 7. 8. 9. 10.

Higher education and training Goods market efficiency Labor market efficiency
Financial market sophistication

Key for

efficiency-driven
economies

Technological Readiness Market size

INNOVATION & SOPHISTICATION FACTORS

Key for

11. 12.

Business sophistication
Innovation

innovation-driven
economies

Countries are spread across almost the entire ranking

Economy Switzerland Sweden Singapore United States Germany Japan Finland Netherlands Denmark Canada Hong Kong SAR United Kingdom Taiwan, China Norway France Australia Qatar Austria Belgium Luxembourg Rank out of 139 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Score (1 to7) 5.6 5.6 5.5 5.4 5.4 5.4 5.4 5.3 5.3 5.3 5.3 5.3 5.2 5.1 5.1 5.1 5.1 5.1 5.1 5.0 Rank out Score Economy of 139 (1 to7) Korea, Rep. 22 4.9 China 27 4.8 Ireland 29 4.7 Estonia 33 4.6 Czech Republic 36 4.6 Poland 39 4.5 India 51 4.3 Brazil 58 4.3 Turkey 61 4.2 Russian Federation 63 4.2 Bulgaria 71 4.1 Kazakhstan 72 4.1 Ukraine 89 3.9 Armenia 98 3.8 Mongolia 99 3.7 Tajikistan 116 3.5 Kyrgyz Republic 121 3.5 Venezuela 122 3.5

Mixed record over the past five years

Ka za kh st on go lia ta n Ky rg yz
121

GCI 2010-2011 rank > High

72

99

116

1 2 3

Decile rank

4 5 6 7 8 9

Low

10
Decile rank GCI 2010-2011 GCI 2005-2006 or edition of earliest inclusion No change in decile ranking

Ta jik is

ep ub lic

an

On average, CA competitiveness lags behind the EU with institutions, infrastructure and education as particular challenges

12th pillar: Innovation 11th pillar: Business sophistication

1st pillar: Institutions 7.00

6.00

2nd pillar: Infrastructure 3rd pillar: Macroeconomic environment

5.00
4.00

3.00 10th pillar: Market size 2.00 4th pillar: Health and primary education

9th pillar: Technological readiness 8th pillar: Financial market development 7th pillar: Labor market efficiency

5th pillar: Higher education and training 6th pillar: Goods market efficiency

EU 27

OECD

Transition Economies

Central Asia

The performance of most countries in the region is remarkably similar across all the dimensions
7

Best/Worst Perf ormer TE

Score (1-7)
6.3

Azerbaijan
5.7

Ukraine
4.9

5.6

5.3

Georgia
4.6

4.9

5.2

4.9

4.9 4.7 4.4

4.7

Moldova
4
3.7

Armenia
3.5
3.5

3.6

Transition Economies Average

3.2
3.0

3.4 3.0 3.1 2.7

2.5
2.1 2.1

Health and primary education

Higher education and training

Business sophistication

Technological readiness

Institutions

Macroeconomic environment

Inf rastructure

Goods market ef f iciency

Overall GCI 2010-2011

Labor market ef f iciency

Financial market development

Market size

Innovation

Biggest challenge: reform of public and private institutions

A. Public institutions 6.00 5.00 4.00

5. Security

3.00
2.00 1.00 0.00

1. Property rights

4. Government inefficiency

2. Ethics and corruption

3. Undue influence

EU 27

OECD

Transition economies

Central Asia

Infrastructure for transport and electricity is underdeveloped compared to other transition economies

Quality of electricity supply Quality of air transport infrastructure Quality of port infrastructure Quality of railroad infrastructure Quality of roads Quality of overall infrastructure 1 Central Asia 2 3 4 OECD 5 EU 27 6 7

Transition economies

Participation in education is high, but quality is low and ill adapted to the needs of business
5th pillar: Higher education and training 6.00

5.00
4.00 3.00 C. On-the-job training 2.00 A. Quantity of education

B. Quality of education EU 27 OECD Transition economies Central Asia

Goods markets are not efficient mainly due to a high extent of market dominance
6.00 5.00 4.00 3.00 2.00 2.95 4.15 3.24 3.42 3.91 3.98 3.90 3.35

1.00

Central Asia

Transition economies

OECD

EU 27

Financial markets have suffered during the financial crisis, and access to finance remains a major bottleneck

Soundness of banks Venture capital availability Ease of access to loans

Financing through local equity market

Affordability of financial services Availability of financial services 1.00 Central Asia 1.50 2.00 2.50 3.00 3.50 OECD 4.00 4.50 5.00 5.50 6.00

Transition economies

EU 27

Key messages
Countries show very similar competitiveness performance Efficient labour markets are key advantages, in some countries macroeconomic stability is high Disadvantages are related to infrastructure, institutions, quality of education, market efficiency, and financial markets Addressing challenges related to institutions is key and will require above all strong political will, but could impact on investment and growth quickly.