DEVELOPING COMPETITIVENESS

INDICATORS FOR EMERGING ECONOMIES

BY: CONRAD SEBEGO(MANAGER: BENCHMARKING &

INNOVATION)NICKOLAOS GAVALETAKIS (ECONOMICS RESEARCHER)

PRESENTATION OUTLINE

Why?Objectives of studyScope of researchProposed approachExpected outcomesWay-forward suggestionsConcluding remarks

WHY?

Current World Competitiveness Indicators insufficient in reflecting the true economic prosperity of developing economies

Developing economies not ranked fairly by current measure

The current criteria used to rank developing economies are based on the economic prosperity of developed economies

There should be a separate ranking based on the economic prosperity of developing economies

Economic prosperity of SA and other developing economies should be evaluated in relation to the achievement of the MDG’s set by UN

WHY?

The current indicators are not feasible to indicate true potential + represent the inadequacies of developing economies

Inadequacies including lack of infrastructure, ICT’s etc. of emerging economies ranked i.t.o circumstances prevailing in developed economies

Main shortcoming: Ranking i.t.o developed countries and no comparison with other developing economies to provide accurate representation of true potential of such economies and benchmarking these with regard to economies of similar inadequacies + experiences.

OBJECTIVES OF STUDY

Framework to access development + economic growth to eradicate poverty of emerging economies

Review existing indicators for suitability + appropriateness

Evaluate approaches for economic development specifically for the needs of SA Examine MDG’S and outcomes

SCOPE OF THE RESEARCH

Examine the factors + criteria that are considered by IMD for assessing competitiveness of nations i.e. World Competitiveness Report

Examine the programmes to be implemented by government for assessing the competitiveness + economic growth of South Africa

Examine World Development Report + African Development Report + NEPAD Examine link of MDG’s to poverty measure to be implemented by Stats SA

Principles of World Competitiveness

Economic performance

Government efficiency

Business efficiency

Infrastructure

Weaknesses in Economic performance

Unemployment rate (61)

Employment (60)

Youth unemployment (50)

Trade to GDP ratio (47)

GDP per capita (45)

Weaknesses in Government Efficiency

Discrimination- race, gender (61)

Immigration laws (58)

Personal security and private property (55)

Labour regulations -hiring/firing practices + minimum wages etc. (53)

Investment incentives (51)

Weaknesses in Business Efficiency

Skilled labor readily available (61)

Brain drain (61)

Labour force (59)

Finance skills readily available (54)

Labor relations are generally productive (54)

Sub-factor Breakdown: Productivity +Efficiency (56)

Weaknesses in Infrastructure

Life expectancy at birth (61)

Internet costs - Cost of 20 hours dial up p/m (61)

Health problems -AIDS, alcohol, drug abuse etc (61)

Energy intensity (60)

Human Development Index (58)

Challenges identified by IMD Study in 2006

Stabilize the exchange rate Invest in new technology to improve imports of consumer goods Augment infrastructure investment, planning + competition to reduce commuter transport Amend competition / industrial policies to enhance consumer/service industries + competitiveness Enhance regulations for SMEE’s to Increase their growth and employmentImprove education, industrial skills + commuter transport

Programmes link to IMD Study

Raise the rate of investment in 1st

economy (51) Reduce the cost of doing business To speed up process of skills development (61) To improve health profile of the nation as a whole (61) To improve the safety + security of all citizens + communities To implement additional measures to open wider the doors of learning + culture (61)

PROPOSED APPROACH

Feedback, ideas + suggestions on Executive Summary of Indicators Form working groups to investigate + report back on MDG’s + targets Investigate buy-in from relevant stakeholders, civil society, government departments + business MOU with stakeholders Steering committee formed from organisations involved to overlook task assigned to each

EXPECTED OUTCOMES Benchmark competitiveness indicators for developing economies to assess development + growth to eradicate poverty

Benchmarking improvements +shortcomings in achieving MDG’s by 2014

Improvise realistic targets on infrastructure development for developing economies

Policy + advocacy of benchmark indicators by government – link with Poverty measure

Initiate benchmark indicators for buy-in from other developing economies to follow +implement

State of the Nation Address +Budget Speech

10th Anniversary of Freedom “ None of the great social problems we have to solve is capable of resolution outside the context of jobs and the alleviation and eradication of poverty. ”

“ the struggle to eradicate poverty has been and will continue to be a central part of the national effort to build the new South Africa.”

Trevor Manuel = “budget surplus in the coming fiscal year. The fiscal stance creates space for our future social security reforms and allows for rising funding levels for public sector infrastructure, improvements to education and other government priorities, while enhancing the competitiveness of the economy and sustaining the current growth trajectory.”

State of the Nation Address +Budget Speech

“ … working with various governments, including a visit to countries such as Tunisia and Chile where great progress has been made in dealing with poverty, does point to some defects in our systems in this regard. From experience of delegation it is clear among other things : Define clearly the poverty matrix of our country Develop a proper database of household living in poverty Identify and implement specific interventions relevant to these households Monitor progress in these households as the programmes take effect in graduating them out of poverty In this context, address all indigence, especially the high numbers of woman effected Co-ordinate and align all anti-poverty programmes to maximize impact +avoid wastage and duplication “

As

Achieving ASGISA initiativesidentified as targets for 2007

Increase export goods + services Accelerate investment in areas of comparative advantage Raise levels of productivity Generate jobs for low skilled workers Red tape = business constraints Infrastructure capacity enhanced for telecommunications +rails +roads + ports +electricity + water Improve public sector = state tool for reconstruction and development

WAY-FORWARD• Refine role and contribution of the external Contributors• Formalise the relationship between NPI and Contributors to the research study• Incorporate new thoughts about formulation of concept and definition of the scope

• Develop a project plan, with clear milestones, budget, roles and responsibilities

• Establish and agree on feedback + progress review mechanisms

CONCLUDING REMARKS

Beneficial for benchmarking SA to developing economies Indicators improve efficiency + effective implementation of MDG’s Future : Establish a broad based benchmark for developing economies Competitiveness and Productivity to eradicate poverty Stimulate growth + sustainable development + better quality of life for all Form foundation for greater attention achieving MDG’s

END!

Thank you for your attention!