Jamaica plummets in competitiveness rankings
Published:Friday | September 9, 2011 | 12:00 AM
Steven Jackson, Business Reporter
Jamaica scored its lowest ever global competitiveness ranking, slipping 12 spots to 107 at the same time it attained the dubious title as the world's worst macroeconomy, according to the annual competitiveness index released Wednesday by the World Economic Forum (WEF).
The world's most competitive countries are Switzerland, Sinagpore, Sweden, Finland, United States and Germany, according to the Global Competitiveness Report 2011-12.
The US also fell one place in the rankings to No. 5 due to its untamed deficit of US$1.3 trillion and declining faith in government.
Jamaica, which ranked 67th in the world in 2006-07, has nose-dived to 107 among 142 countries. Jamaica's rank, however, remains the fourth highest in the Caribbean with Guyana at 109, Dominican Republic at 101 and Haiti at 141.
Puerto Rico remained the highest-ranked Caribbean country at 35, up from 41 last year, followed by Barbados at 42 from 41 last year and Trinidad & Tobago at 81 from 84.
The competitive ranking measures 12 criteria; Jamaica performed the worst in the category of macroeconomic environment.
The report noted that Jamaica was particularly hurt by its fiscal and debt dynamics. The factors measured in that category included the Government's budget balance at negative 5.8 per cent of GDP which ranked it at 106 out of 142 nations; its gross national savings to GDP at 5.9 per cent which ranked it at 133; its annual inflation change at 12.6 per cent which ranked it at 137; its interest rate spread at 14.1 per cent which ranked it at 127; its general government debt to GDP at 139.7 per cent which ranked it at 140; its country credit rating at 31.2 out of 100 which ranked it at 111.
Jamaica's fall to the bottom as the world's worst macroeconomy occurred during a period when the country is experiencing 30-year low interest rates, and has the lowest inflation rate in 20 years. It also happened in the midst of the largest drop in the murder rate in 20 years.
The macro improvements were due, in part, to the Jamaica Debt Exchange which lowered the interest cost burden for Government on its domestic liabilities. The debt stock is now at J$1.58 trillion.
Crime and security continues to be the greatest concern amongst Jamaicans, said the report. Efforts to speak with the Jamaican contributors to the research at Mona School of Business were unsuccessful.
"The highest drops in the region have been experienced in some countries of Central America - for example, in Costa Rica, Guatemala, El Salvador, Nicaragua, and Jamaica - mainly due to a deterioration of the security conditions," stated the report.
"In order to keep the positive momentum going, Latin America and the Caribbean will need to address some of the persistent challenges that constrain its competitiveness."
Four main challenges continue to affect the region, including weak institutions; poor development of infrastructure; an inefficient allocation of production and human resources; and, increasingly, a lag in innovation, according to the report.