“Health conditions in India significantly below the South Asia average” – The Global Competitiveness Report, 2019 (Page: 16)
The Global Competitive Index (GCI) Report
The global competitiveness report is a tool to help the governments, private sector and civil society organizations to work together to boost productivity and generate prosperity across the globe. It gives an understanding of comparative analysis between countries and allows leaders to gauge areas that need strengthening and to build coordinated responses. It further helps to identify best practices around the world and informs about the domestic level performance.
The World Economic Forum, which has been measuring countries’ competitiveness since 1979, defines competitiveness as: “the set of institutions, policies and factors that determine the level of productivity of a country.”
The Global Competitive Index (GCI) forms the basis of the report. It measures the performance of countries according to 114 indicators that influence a nation’s productivity. The latest edition covered 141 economies, accounting for over 98% of the world’s GDP. In the present report GCI 4.0, it has used an aggregation of 103 individual indicators, derived from a combination of data from international organizations as well as from the World Economic Forum’s Executive Opinion Survey. Further, the indicators are organized into 12 ‘pillars’ as follows:
- Institutions
- Infrastructure
- ICT adoption
- Macroeconomic stability
- Health
- Skills
- Product market
- Labour market
- Financial system
- Market size
- Business dynamism
- Innovation capability
These 12 pillars are divided into four index components and can be seen in Figure 1:
Countries’ scores are based primarily on quantitative findings from internationally recognized agencies such as the International Monetary Fund (IMF) and World Health Organization (WHO), with the addition of qualitative assessments from economic and social specialists and senior corporate executives.
GCI Country Rankings 2019 (Total 141 Countries):
As seen in figure 2, a total of 141 countries’ profiles have been assessed with respect to the competitiveness of a country across different indicators. Singapore has topped the list, and bottom countries which are/have been performing very poorly are Chad, Yemen, Democratic Republic of Congo, Haiti and Mozambique.
Top 10 Competitive Countries:
As seen in figure 3, Singapore has improved from score 83.5, with rank 2 in 2018 to 84.8 in 2019 and gained rank 1. However, the U.S. dropped one rank below Singapore and settled at rank 2 with a score of 83.7. Further, the countries like Hong Kong SAR, Netherlands, Switzerland, Japan, Germany, Sweden, U.K. and Denmark achieved the ranks 3, 4, 5, 6, 7, 8, 9 and 10 respectively. Denmark has seen no change in the position of the rank from the previous year 2018 and remained at the 10th position in 2019 as well.
India’s Overall Performance With Respect to South Asia and Lower Middle Income Group Countries
As seen in figure 4, India’s overall score is 61, and it is ranked at 68th position, below the last year’s rank of 58. It has slipped 10 positions from last year. Out of all the indicators mentioned, health’s position in index Human Capital can be seen worsening with respect to other Asian countries. To this effect, one can say that other Asian countries are doing better in health indicators than India. The ICT Adoption pillar in Enabling Environment Index shows a rank of 120th with a score of 32, which is a concerning one, in terms of other pillars concerned.
As seen in figure 5, the organized crime in the country has increased. It also indicates that the reliability of police services has deteriorated to a level. Judicial independence is less in terms of the execution of their powers. Less freedom of the press, low efficiency of train services, exposure to unsafe drinking water and less reliability of water supply are other major concerns.
From figure 6, it can be explained that the skills of the current workforce are very low. The figure also points out that the prevalence of non-tariff barriers and complexity of tariffs are hurdles of trade openness in India. The percentage of wages and salaried female workers to male workers is very low, along with pay and productivity.
Figure 7 indicates that the percentage of domestic credit to private sectors in GDP is low. It also shows that the low financing of SMEs, high Non Performing Assets (NPA), low attitudes towards entrepreneurial risks, low growth of innovative companies and a low percentage of R&D spending in GDP are the some of the major problems of India.
Reasons For The Slip Down Of The Rank
In the 2019 GCI report, India failed to maintain its previous position of 58th Rank in 2018 due to several reasons listed below:
- The labour market is characterized by a lack of worker rights’ protections
- Insufficiently developed active labour market policies
- Critically low participation of women (ratio of female workers to male workers is 0.26, rank 128)
- Condition of health care remains poor, as reflected in low healthy life expectancy (59.4 years, rank 109), which is one of the shortest outside Africa and significantly below the South Asian average.
- Low skills base (score 50.5, rank 107)
- Low product market efficiency (50.4, rank 101) is undermined by a lack of trade openness (score 43.9, rank 131)
- Lack of ICT adoption (score 31.1, rank 120)
Conclusion
With growing innovation capacity in emerging economies, India should better focus on balancing the technical integration and human capital investments for global employment across developed countries. Further, the GCI report gives an overall understanding of the institutions and their practices across the globe. So, the policymakers across the different spectrum must use this report as one of the policy guiding books to address the issues of contemporary India, where some of the indicators like health, social capital development and labour rights are performing very low.
Lastly, the report says that “the Global Competitiveness Index identifies and assesses the factors that underpin the process of economic growth and human development. It highlights the necessity of addressing the spillover effects and externalities, positive and negative, intended or unintended, of a policy or strategy beyond the direct objective it pursues. The GCI encourages the application of systems thinking, an approach that leaders must adopt in order to apprehend and address today’s complex global challenges. By conceiving of the economy as one of many interacting and interdependent parts that belong to a vast system, policy-makers have an opportunity to develop holistic solutions and strategies”.