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Vietnam Today

Vietnam moves up global competitiveness list

Released at: 14:29, 27/09/2017

Vietnam moves up global competitiveness list

Photo: Viet Tuan

Country up five places to 55th in WEF's Global Competitiveness Index.

by Linh San

The World Economic Forum’s latest Global Competitiveness Index (GCI) presents a mixed picture for East Asia and the Pacific, with big gains by Vietnam, Indonesia, and Brunei Darussalam and demotions for some others.

Among the 17 East Asia and Pacific economies covered by the GCI, 13 have increased their score - albeit marginally - with Indonesia and Brunei Darussalam making the largest strides. Only Singapore, the Philippines, Cambodia, and Laos saw their scores decrease. “Even with China’s gradual slowdown, economic growth has continued to be robust in the region as a result of sustained domestic demand and increased exports from emerging economies,” the report stated.

With a relatively modest increase in its overall score, Vietnam (55th) moves up five places to narrowly surpass the Philippines (56th). Vietnam’s competitiveness is significantly driven by its market size (31st). Although the withdrawal of the US from the Trans-Pacific Partnership (TPP) earlier in 2017 eliminated significant trade opportunities, the country’s growth is nonetheless projected to remain robust from strong exports. Significant improvements are necessary across all pillars, notably among the basic requirement factors (75th) and higher education (84th), as firms perceive that the lack of an educated workforce constitutes a significant hurdle for doing business.

Vietnam could also boost its competitiveness by closing gaps in innovation and sophistication factors with countries at a similar stage of development, such as the Philippines.

Singapore fell behind the US to rank 3rd globally but remains the most competitive economy in the region. Hong Kong SAR is closing the gap, rising from 9th to 6th, while Japan slipped back one place for the second year in a row, to 9th. The lowest-ranked performer among the region’s advanced economies continued to be South Korea, which remained at 26th for a fourth consecutive year, placing it behind Malaysia (23rd), the region’s top emerging economy, and just ahead of China (27th).

Indonesia (36th) is inching its way up the competitiveness ladder, moving ahead five places since last year. Similar to South Korea, it improved its performance across all of pillars. Its position in the rankings is driven mainly by its large market size (9th) and a relatively robust macroeconomic environment (26th). Ranking 31st and 32nd in innovation and business sophistication respectively, Indonesia is one of the top innovators among the emerging economies.

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