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How the world rates South Africa

The world remains in the grips of the economic crisis despite signs of a tentative recovery. The global economy still faces a number of significant challenges that could hamper a genuine upturn, especially in the most advanced economies.

South Africa has held steady in the face of such global economic uncertainty, and is meeting its economic challenges head on. International analysts generally believe that some African countries, including South Africa, are well placed to weather the global storm. South Africa has a large economy and is widely recognised as having solid fundamentals and sound and effective financial systems.

What follows is a round-up of major international surveys, with a special focus on South Africa’s performance.

Global Competitiveness Index

Source: World Economic Forum
Latest publication date: September 2013
South Africa’s ranking: 53 out of 148 countries

South Africa was ranked as the 53rd most competitive country out of 148 surveyed in the 2013/14 World Economic Forum’s Global Competitiveness Index, making it the second highest ranked country in Africa after Mauritius (45th).

It took over Brazil to take second place among the BRICS’ economies, with China at 29 and Brazil dropping to 56th place (from 48).

Conducted by the World Economic Forum (WEF) in partnership with leading academics and a global network of research institutes, the index calculates its rankings from publicly available data and a poll of business leaders in 148 economies. The main goal of the report is to evaluate countries’ economic environment and their ability to achieve sustained levels of prosperity and growth.

According to the report, South Africa does well on measures of the quality of its institutions (41st,) including intellectual property protection (18th,) property rights (20th,) and in the efficiency of the legal framework in challenging and settling disputes (13th and 12th, respectively.)

The high accountability of its private institutions (2nd) further supports the institutional framework.

South Africa’s financial market development “remains impressive” at 3rd place, the report says. The country also has an efficient market for goods and services (28th,) and it does “reasonably well” in more complex areas such as business sophistication (35th) and innovation (39th.)

However, the report notes that South Africa’s strong ties to advanced economies, notably the euro area, make it more vulnerable to their economic slowdown and likely have contributed to the deterioration of fiscal indicators: its performance in the macroeconomic environment has dropped sharply (from 69th to 95th.)

Africa Competitiveness report

Source: World Economic Forum
Latest publication date: May 2013
South Africa’s ranking: 2 out of 38 African countries

South Africa is rated first overall in terms of economic competitiveness out of 38 African countries, according to the Africa Competitiveness Report, which reviews the degree of competitiveness of Africa’s economies.

Rated as being on a par with innovative countries such as India and Brazil, South Africa is credited as having high-quality scientific research institutions, strong investment in research and development, and a significant level of collaboration between business and universities in research.

South Africa is rated as the second most innovative African country, firmly between with Tunisia in top spot and Senegal.

Based on data collected by the Global Competitiveness Survey, the African Competitiveness Report is a biannual report compiled by economic and financial specialists from the WEF, the World Bank and the Africa Development Bank. Thirty- eight African countries were assessed and ranked.

The report notes that while African economies have made important strides in improving their economies in recent years, closer regional integration is a crucial driver for enhancing competitiveness and for ensuring that the continent delivers on its massive growth promise.

The competitiveness report assesses countries on 12 pillars ranging from institutions to innovation. South Africa leads the continent in financial market development, technological readiness, market size, business sophistication and innovation.

But South Africa’s poor education performance, in combination with its labour market efficiency performance, points to a country which is not fully realising its “human resource potential”, the report suggests.

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