Only one Caribbean Community (CARICOM) country made the top 50 countries in the World Economic Forum’s “Global Competitiveness Report 2010-2011”. Barbados is rated at 43 of 139 countries that were surveyed. Trinidad and Tobago, Jamaica, and Guyana were rated 84, 95, and 110 respectively.
No other CARICOM country was rated because of a lack of survey data.
This is not good news for the CARICOM area already beset by severe economic problems including high debt to GDP ratios, increasing unemployment, and contracting economies.
Barbados’ higher ranking over the three other CARICOM countries surveyed is due, according to the Report, to its better health and education facilities and technological readiness, but it got poor marks for inefficient government bureaucracy, access to financing, a poor work ethic among the labour force and foreign currency regulations.
Crime rated highest among the problems that beset Trinidad and Tobago followed by an inefficient government bureaucracy and, surprisingly, access to financing. None of its rankings – not for basic requirements, efficiency enhancers or business sophistication and innovation - matched Barbados.
However, Barbados’ ranking in the specific areas of business sophistication and innovation at 52, suggests that there is need for the business community to improve its performance if Barbados is to continue to be a leader for the region in maintaining global competiveness.
The Report highlights University-Industry collaboration in Research and Development as a strong point for Barbados. With a ranking of 40, this is an area that Barbados could further develop, and that other CARICOM countries should emulate across a broad area of economic activity.
Like Trinidad and Tobago, crime was identified as the biggest problem facing Jamaica’s competitiveness. An inefficient government bureaucracy, access to financing and an inadequately educated work force were also identified among its major setbacks.
High tax rates headed the list of Guyana’s problems, followed by crime, and inadequately educated work force and access to funding. The enrolment rate for secondary education and hiring and firing practices were Guyana’s two most notable competitive advantages with rankings of 16 and 20 respectively.
So, who are the top ten most competitive countries in the world for business? In order of priority, they are: Switzerland, Sweden, Singapore, United States, Germany, Japan, Finland, Netherlands, Denmark, and Canada.
The inclusion of Singapore, a small island state, is significant. It shows that small size is not a barrier to being competitiveness in business. Singapore, incidentally, was the top recipient last year of investment of every country in the world.
And, what distinguishes these top ten countries from the other 129 nations in terms of their ability to be competitive globally and attract businesses? The World Economic Forum identifies 12 interrelated pillars for competitiveness, among them are: the strength of institutions and laws, political stability, the quality of infrastructure, public health, and education, and levels of technology and innovation. The Forum makes the point that “the pillars are not independent; they tend to reinforce each other and a weakness in one area often has a negative impact on other areas”.
In the case of Singapore, a physically small island state, it is ranked “number one for government efficiency; second for its financial market sophistication ensuring the proper allocation of these factors to its best use”. It is also ranked fifth for its world-class infrastructure with excellent roads, ports, and air transport facilities. In addition, it has a strong focus on education, providing individuals with the skills needed for a rapidly changing economy.
Singapore’s accomplishments are greatly to be admired particularly when it is considered that both Guyana and Jamaica at the time of their independence in 1962 and 1966 respectively were more prosperous than Singapore.
Clearly there are lessons to be learned by Caribbean states from Singapore’s success. Not all of them will be transferable because of the different work culture that exists between Singapore and the Caribbean, but there are other basic experiences and knowledge that Singapore could offer, among them: how to make government more efficient and institutions stronger.
Lessons might also be learned from Malaysia, which, like 13 of the 15 CARICOM states and Singapore, is a member of the 54-nation Commonwealth. Apart from Taiwan, China, and a few oil-rich Arab states, Malaysia is the highest ranked developing country in the competitive index at number 26. In business sophistication and innovation, it is ranked at 25 and 24 respectively of the 139 surveyed countries. Were it not for its security situation, Malaysia would have been higher up the list.
CARICOM countries have to do much better if they are to emerge from their present economic morass and rise up to claim a significant share of the world’s opportunities for investment and business.
Bringing crime under control has to be a top priority for CARICOM countries and they can best do so together. The sooner governments explore the establishment of regional machinery for collectively tackling crime within each country, the better.
Establishing the Caribbean Single Market also should be accelerated with mergers and acquisitions between Caribbean countries being facilitated by legislation. This will improve business sophistication, enhance efficiencies, and strengthen institutions. Taxation levels in many countries also have to be reviewed to make them more competitive globally. Importantly, access to financing should be a high priority that should be tackled by governments and the private sector collectively devising ways to do it.
The government bureaucracy that slows down investment also has to be overhauled rapidly. Inordinate delays and red tape that slow investment cost Investors money. They don’t hang around; not with a world eager to lure them.
A series of meaningful consultations between governments and the University of the West Indies; between governments and the regional private sector organizations; and the creation of task forces drawn from all three could offer implementable solutions to the problems of competitiveness that beset the Caribbean region.
It is time to get serious, or get left behind.