Evo pa citajte malo.....ako vam nije mrsko ...iz danasnjeg journala:D:D
Western Europe Shows
Slip in Competitiveness
By G. THOMAS SIMS
Staff Reporter of THE WALL STREET JOURNAL
September 29, 2005; Page A17
FRANKFURT – Europe's largest economies -- Germany, the U.K., France, Italy, and Spain -- are losing ground in an annual survey of global competitiveness, dragged down by concerns of sluggish economic growth and big budget deficits.
But in the survey by the Geneva-based World Economic Forum, those countries still rank above China and India, often cited as the greatest competitive threats to Western economies as they flood markets with inexpensive products and labor. The two ranked 49th and 50th, just behind Italy at 47th, and close to their rankings the year before.
Despite their high growth rates and low production costs, the survey found that China and India need to cut red tape, educate their people and improve infrastructure in order to compete in the long term.
The results are compiled through economic data and from surveys of nearly 11,000 business leaders. The World Economic Forum defines competitiveness not just on the basis of productivity and exchange rates. It also looks at policies and institutions that can affect productivity and prosperity.
Finland topped the list for the third consecutive year. The U.S. was second, as it was in 2004. But the U.S.'s image is tarnished by large budget deficits, a near-record trade deficit and low household savings. The U.S. ranked 92nd of 117 countries on its fiscal balance, and 109th on the national savings rate.
Japan ranked 12th, still suffering from years of deflation, and it slipped three spots because of its management of public finances. The forum said the planned overhaul of the postal system should help boost Japan's ranking.
Hong Kong also slipped by seven spots to No. 28, with its judicial system now seen as less independent.
Along with Finland, the Nordic European countries of Sweden, Denmark, Iceland and Norway hold five of the top 10 spots, as they did last year. Other stars include fifth-ranked Taiwan, down one spot from last year, and sixth-ranked Singapore, up one spot from last year.
Western Europe's general slip in competitiveness from the beginning of the decade -- though from fairly high levels -- reflects the region's economic development of late. Gross domestic product in the 12-nation euro zone that forms the bulk of the region's economy is projected to have expanded on average by 1.3% during the first five years of this decade, compared with more than 2% during the previous decade. The euro zone is forecast to grow just 1.2% this year, far behind the global average of 4.3%, according to the International Monetary Fund. The region's budget deficit has grown to 2.7% of GDP in 2004 from 1.9% of GDP in 2001.
"What you have is several years of low growth, which has damped the mood of the business community," said Augusto Lopez-Claros, chief economist of the World Economic Forum. "There is an impact on investment, on hiring. It is a slight vicious circle. ... This means the business community is in a mood of retrenchment."
The dimmer outlook is even beginning to harm the outlook for relatively robust Spain, which has been one of the euro zone's fastest-growing economies in recent years. Spain's overall ranking dropped to 29 from 23, and the indicator ranking Spain's economic outlook has dropped to 65 this year from 29 in 2001.
"You look at the growth figures, and Spain is doing well, but with respect to a bad neighborhood," Mr. Lopez-Claros said.
Italy is in the worst shape among the big EU countries, ranked only above Poland (at No. 51) among the 25 EU members. Lagging behind nations such as Tunisia and just ahead of Botswana, Italy is burdened by perceptions that its government interferes in the private sector.
The survey's measure of short-term outlook ranks Italy 110th of the 117 countries surveyed. Its government debt is more than 106% of GDP, above the 63% average of the 25-nation EU, according to the EU's statistics office.
Write to G. Thomas Sims at
[email protected]
