Sliding competitiveness

Newspaper Title: AlAhram Weekly

Newspaper Number:

Friday - 28 June 2013

EGYPT fell 13 positions on this year’s Global Competitiveness Index (GCI), dropping from 94

(among 142 countries) last year to 107 among 144 countries this year. The GCI, issued by

the World Economic Forum, studies and benchmarks the factors underpinning

national competitiveness.The general score takes into account scores in the various areas

on which competitiveness is based. These include institutions, infrastructure, macroeconomic

environment, health and education, labour market efficiency, financial market development,

technological readiness and market size, as well as business sophistication and innovation.

According to the GCI, Egypt’s score was “arguably influenced by the uncertainty caused by

the political transition the country has experienced since the events of the Arab Spring.”

It highlighted that according to the business community government efficiency

has deteriorated by 22 positions to 106th, and the security situation, which was particularly

affected by the events, has dropped 40 ranks to 128th.

Nonetheless, the report indicated improvement in areas such as institutions, which showed

“less favouritism being displayed by government officials” and “stronger corporate ethics,

suggesting the potential for further positive developments in the future.”

But the report stressed that “many economic policy challenges lie ahead for the new government

to put the country on a sustainable and equitable growth path.” It said that for Egypt to “benefit

from the considerable potential that lies in its large market size and proximity to key global

markets, the country will have to raise its productive potential across the domestic economy.”

It highlighted that Egypt must improve the macroeconomic environment through a “credible fiscal

consolidation plan, must improve domestic competition to allow for new entrants and must

work on improving labour market flexibility to increase employment in the medium term.”

On the regional level, the report said that Israel and the six members of the Gulf Cooperation

Council were performing strongly, whereas “elsewhere in the region, the lack of competitiveness of

the Levantine and North African countries is worrisome.”