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!