Colombia in The Global Colombia in The Global Competitiveness Report Competitiveness Report 2009-20102009-2010

Margareta Drzeniek Hanouz, Senior EconomistWorld Economic Forum

UNCTAD Virtual Institute Study TourGeneva | 22 October, 2009

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The World Economic Forum

The World Economic Forum is an independent international organization committed to improving the state of the world by engaging leaders in partnerships to shape the global, regional and industry agendas.

Established in 1971, the Forum has its headquarters in Geneva, Switzerland, with offices in New York and Beijing.

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The World Economic ForumMember Communities

Strategic Partners

Industry Partners

Forum Members

Global Growth Companies

Technology Pioneers

Thought Leaders (religion, culture, science)

Media Leaders

Women Leaders

Young Global Leaders

Social Entrepreneurs

Governments and International Organisations

Civil Society

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The World Economic Forum – ActivitiesGlobal and Regional Summits in 2009

January World Economic Forum Annual Meeting 2009

April World Economic Forum on Latin America, Brazil

May World Economic Forum on the Middle East, Jordan

June World Economic Forum on Africa, South Africa

World Economic East Asia, Korea

September Annual Meeting of the New Champions 2009, Dalian, China

November India Economic Summit, India

Summit on the Global Agenda, Dubai, UAE

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The World Economic Forum Initiatives

Beyond its Summit activities, the World Economic Forum runs a number of initiatives including:

The Global Health Initiative

The Global Education Initiative

Energy Poverty Action

Climate Change

The Water Initiative

Financing for Development

The Global Risk Network

Scenario Planning

The Global Competitiveness Network

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Global Competitiveness Network

Flagship product: The Global Competitiveness Report:

launched in 1979 covering 16 countries; it has since

expanded its coverage to 133 countries.

Editor: Professor Klaus Schwab

Goal: to provide a benchmarking tool for policy-makers

and business leaders

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The Global Competitiveness Report What are we trying to measure?

GDP per capita 1980-2008 (PPP in international dollars)

Source: IMF World Economic Outlook Database, April 2009

0

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16,000

1980 1985 1990 1995 2000 2005

Bolivia

Brazil

Chile

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Use of hard data (publicly available information) and survey

data (from the Executive Opinion Survey)

The Executive Opinion Survey records the perspectives of

business leaders around the world; survey data is

indispensable, particularly for dimensions where no reliable

hard data sources exist

The Global Competitiveness Report Data sources

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The set of institutions, policies, and factors that determine the

level of productivity of an economy.

The level of productivity, in turn, sets the sustainable

level of prosperity that can be earned by an economy.

The Global Competitiveness IndexDefinition

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The Global Competitiveness Index The Framework

Key for

efficiency-driven economies

Key for

factor-driven economies

1. Institutions

2. Infrastructure

3. Macroeconomic stability

4. Health and primary education

5. Higher education and training

6. Goods market efficiency

7. Labor market efficiency

8. Financial market sophistication

9. Technological Readiness

10. Market size

11. Business sophistication

12. Innovation

Key for

innovation-driven economies

BASIC REQUIREMENTS

EFFICIENCY ENHANCERS

INNOVATION & SOPHISTICATIONS FACTORS

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The Global Competitiveness Index 2009-2010 Top 20 and selected economies

2009 2009 2008 2009 2009 2008 rank Economy score rank rank Economy score rank

1 Switzerland 5.60 2 22 Qatar 4.95 26

2 United States 5.59 1 24 Malaysia 4.87 21

3 Singapore 5.55 5 29 China 4.74 30

4 Sweden 5.51 4 30 Chile 4.70 28

5 Denmark 5.46 3 31 Czech Republic 4.67 33

6 Finland 5.43 6 33 Spain 4.59 29

7 Germany 5.37 7 36 Thailand 4.56 34

8 Japan 5.37 9 40 Tunisia 4.50 36

9 Canada 5.33 10 45 South Africa 4.34 45

10 Netherlands 5.32 8 49 India 4.30 50

11 Hong Kong SAR 5.22 11 54 Indonesia 4.26 55

12 Taiwan, China 5.20 17 56 Brazil 4.23 64

13 United Kingdom 5.19 12 60 Mexico 4.19 60

14 Norway 5.17 15 61 Turkey 4.16 63

15 Australia 5.15 18 63 Russian Federation 4.15 51

16 France 5.13 16 70 Egypt 4.04 81

17 Austria 5.13 14 82 Ukraine 3.95 72

18 Belgium 5.09 19 99 Nigeria 3.65 94

19 Korea, Rep. 5.00 13 113 Venezuela 3.48 105

20 New Zealand 4.98 24 132 Zimbabwe 2.77 133

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Latin America and the CaribbeanDelta

Economy Rank Score Rank Score RankChile 30 4.70 28 4.72 -2

Puerto Rico 42 4.48 41 4.51 -1Barbados 44 4.35 47 4.40 3Costa Rica 55 4.25 59 4.23 4Brazil 56 4.23 64 4.13 8Panama 59 4.21 58 4.24 -1

Mexico 60 4.19 60 4.23 0Uruguay 65 4.10 75 4.04 10Colombia 69 4.05 74 4.05 5El Salvador 77 4.02 79 3.99 2Peru 78 4.01 83 3.95 5

Guatemala 80 3.96 84 3.94 4Argentina 85 3.91 88 3.87 3Trinidad and Tobago 86 3.91 92 3.85 6Honduras 89 3.86 82 3.98 -7Jamaica 91 3.81 86 3.89 -5

Dominican Republic 95 3.75 98 3.72 3Suriname 102 3.57 103 3.58 1Guyana 104 3.56 115 3.47 11Ecuador 105 3.56 104 3.58 -1Venezuela 113 3.48 105 3.56 -8

Nicaragua 115 3.44 120 3.41 5Bolivia 120 3.42 118 3.42 -2Paraguay 124 3.35 124 3.40 0

GCI 2009-2010 GCI 2008-2009

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Evolution of Columbia’s results between 2008-2009 and 2009-2010

Global Competitiveness Index 69 4.05 74 4.05

1st pillar: Institutions 101 3.37 87 3.66

2nd pillar: Infrastructure 83 3.20 80 3.07

3rd pillar: Macroeconomic stability 72 4.59 88 4.71

4th pillar: Health and primary education 72 5.34 67 5.53

5th pillar: Higher education and training 71 3.89 68 3.96

6th pillar: Goods market efficiency 88 3.98 82 4.05

7th pillar: Labor market efficiency 78 4.29 92 4.14

8th pillar: Financial market sophistication 78 4.09 81 4.06

9th pillar: Technological readiness 66 3.57 80 3.12

10th pillar: Market size 31 4.63 37 4.45

11th pillar: Business sophistication 60 4.17 64 4.20

12th pillar: Innovation 63 3.17 61 3.22

2009-2010 2008-2009

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Macroeconomic stability

3rd pillar: Macroeconomic stability 72 4.59 88 4.71 16 -0.12

Government budget balance (hard data) 82 D -2.60 69 D -0.70 -13 -1.90

National savings rate (hard data) 64 D 22.10 81 D 19.70 17 2.40

Inflation (hard data) 52 D 7.00 71 D 5.54 19 1.45

Interest rate spread (hard data) 87 D 7.43 94 D 7.37 7 0.07

Government debt (hard data) 78 D 42.82 92 D 53.50 14 -10.68

2009-2010 2008-2009

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Labor market efficiency

7th pillar: Labor market efficiency 78 4.29 92 4.14 14 0.15

A. Flexibility 80 4.52 103 4.20 23 0.32

Cooperation in labor-employer relations 48 A 4.58 53 D 4.69 5 -0.11

Flexibility of wage determination 60 D 5.16 71 D 5.12 11 0.04

Rigidity of employment (hard data) 35 A 24.00 40 A 27.00 5 -3.00

Hiring and firing practices 79 D 3.70 73 D 3.75 -6 -0.05

Firing costs (hard data) 89 D 59.00 89 D 59.00 0 0.00

Extent and effect of taxation 120 D 2.69 104 D 2.87 -16 -0.18

Total tax rate (hard data) 123 D 78.40 124 D 82.40 1 -4.00

B. Efficient use of talent 77 4.06 74 4.08 -3 -0.03

Pay and productivity 110 D 3.32 104 D 3.67 -6 -0.35

Reliance on professional management 81 D 4.18 72 D 4.54 -9 -0.36

Brain drain 82 D 3.06 70 D 3.18 -12 -0.12

Female participation in labor force (hard data) 49 A 0.84 59 D 0.78 10 0.05

2009-2010 2008-2009

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Technological readiness

9th pillar: Technological readiness 66 3.57 80 3.12 14 0.45

Availability of latest technologies 96 D 4.22 110 D 3.70 14 0.53

Firm-level technology absorption 95 D 4.40 101 D 4.24 6 0.16

Laws relating to ICT 50 A 4.22 53 D 4.09 3 0.13

FDI and technology transfer 75 D 4.71 88 D 4.63 13 0.09

Mobile telephone subscriptions (hard data) 66 D 88.50 69 D 64.31 3 24.19

Internet users (hard data) 46 A 36.62 75 D 14.49 29 22.13

Personal computers (hard data) 70 D 7.61 82 D 5.38 12 2.23

Broadband Internet subscribers (hard data) 61 D 4.07 65 D 1.36 4 2.71

2009-2010 2008-2009

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Institutions: public

1st pillar: Institutions 101 3.37 87 3.66 -14 -0.29

A. Public institutions 106 3.13 90 3.44 -16 -0.32

1. Property rights 88 3.65 71 4.10 -17 -0.45

Property rights 83 D 3.97 73 D 4.44 -10 -0.48

Intellectual property protection 94 D 3.00 74 D 3.40 -20 -0.40

2. Ethics and corruption 96 2.56 82 2.76 -14 -0.20

Diversion of public funds 99 D 2.92 87 D 3.20 -12 -0.27

Public trust of politicians 88 D 2.19 80 D 2.32 -8 -0.13

3. Undue influence 88 3.04 68 3.40 -20 -0.36

Judicial independence 76 D 3.64 63 D 4.08 -13 -0.44

Favoritism in decisions of government officials 111 D 2.45 95 D 2.73 -16 -0.28

4. Government inefficiency 80 3.38 71 3.54 -9 -0.15

Wastefulness of government spending 85 D 3.07 79 D 3.25 -6 -0.19

Burden of government regulation 107 D 2.69 96 D 2.83 -11 -0.13

Efficiency of legal framework in settling disputes 85 D 3.31 n/a n/a n/a n/a

Efficiency of legal framework in challenging regulations 72

D

3.46 n/a n/a n/a n/a

Transparency of government policymaking 52 D 4.38 48 A 4.35 -4 0.03

5. Security 132 3.00 127 3.41 -5 -0.41

Business costs of terrorism 133 D 2.56 134 D 2.95 1 -0.39

Business costs of crime and violence 126 D 2.64 118 D 3.26 -8 -0.62

Organized crime 131 D 2.66 129 D 3.33 -2 -0.67

Reliability of police services 69 D 4.14 77 D 4.10 8 0.04

2009-2010 2008-2009

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Institutions: private

B. Private institutions 83 4.09 69 4.30 -14 -0.21

1. Corporate ethics 68 3.89 68 4.08 0 -0.18

Ethical behavior of firms 68 D 3.89 68 D 4.08 0 -0.18

2. Accountability 86 4.28 74 4.52 -12 -0.24

Strength of auditing and reporting standards 91 D 4.20 83 D 4.39 -8 -0.18

Efficacy of corporate boards 70 D 4.53 77 D 4.61 7 -0.08

Protection of minority shareholders’ interests 87 D 4.10 64 D 4.56 -23 -0.45

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Colombia vs. Efficiency-driven countries

1

3

5

7Institutions

Infrastructure

Macroeconomic stability

Health and primary education

Higher education and training

Goods market efficiency

Labor market efficiency

Financial marketsophistication

Technological readiness

Market size

Business sophistication

Innovation

Colombia Stage 2

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Most problematic factors for doing business

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Corruption

Access to f inancing

Tax rates

Ineff icient government bureaucracy

Tax regulations

Inadequate supply of infrastructure

Restrictive labor regulations

Inflation

Policy instability

Inadequately educated w orkforce

Crime and theft

Poor w ork ethic in national labor force

Foreign currency regulations

Government instability/coups

Poor public health

Percent of responses

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The Global Competitiveness Report 2009-2010 Expert Survey on impact of the crisis

In order to get a sense of the extent to which the global recession is affecting the longer-term competitiveness of countries, the Forum carried out a survey of selected leading macro and business economists.

Respondents were asked to rate the degree to which they believe the present global recession will have a positive or negative impact, on a scale of 1 (negative) to 7 (positive) on selected countries, with 4 (the central value) indicating that the recession will have no impact.

The 37 countries included were those ranked in the top 20 of last year’s GCI, and other relevant regional economies.

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The Global Competitiveness Report 2009-2010 Expert Survey on impact of the crisis

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The Global Competitiveness Report 2009-2010How to obtain more information

Visit our website for further information and to browse

The Global Competitiveness Report 2009-2010:

www.weforum.org/gcr