Sri Lanka becomes the most improved economy in the South Asian region in Global Competitiveness Index 2019, by gaining 1.1 index points and improving its ranking to 84th, out of 141 countries, due to the improvements in socio-economic elements.
The country was ranked 85th in the 2018 Global Competitiveness Index, compiled by Geneva-based World Economic
Sri Lanka has made steady progress in key indicators such as corporate governance, transport infrastructure, labour markets, research and development, entrepreneurial culture, judicial independence, efficiency of legal framework in challenging regulations and freedom of the press.
Sri Lanka is ranked 50th, out of 141 countries, in terms of transport infrastructure and 56th in terms of corporate governance, despite a decline in the strength of auditing and accounting standards.
The country is also ranked relatively high in terms of financing of SMEs and venture capital availability.
Sri Lanka’s public sector performance has also been enhanced mainly due to an increase in the efficiency of the legal framework in settling disputes.
However, in terms of trade openness, Sri Lanka is the second worst performing county, being ranked at the 140th position, out 141 countries.
Further, Sri Lanka has poorly performed in terms of property rights, labour market flexibility and quality of land administration, being ranked at 123rd, 132nd and 135th, respectively.
The stability of Sri Lanka’s financial system has also declined due to an uptick in non-performing loans, widening credit gap and a decline in the soundness of the banking system.
Sri Lanka is ranked at the 92nd position in terms of the future orientation of the government with weak performances in the legal framework’s adaptability to digital business models and the government’s responsiveness to change.
Although India has slipped 10 spots in this year’s index, India is ranked ahead of Sri Lanka at the 68th position. Followed by Sri Lanka, Bangladesh is ranked at the 105th place, Nepal at the 108th place and Pakistan at the 110th place.
With a score of 84.8, Singapore becomes the world’s most competitive economy in 2019, overtaking the United States, which falls to the second place, followed by Hong Kong SAR (third), the Netherlands (fourth) and Switzerland (fifth).
The Global Competitiveness Report, which was launched in 1979, provides an annual assessment of the drivers of productivity and long-term economic growth.
The index is based on 103 indicators organised into 12 themes. Each indicator, using a scale from zero to 100, shows how close an economy is to the ideal state or ‘frontier’ of competitiveness.The pillars, which cover broad socio-economic elements, are institutions, infrastructure, ICT adoption, macroeconomic stability, health, skills, product market, labour market, financial system, market size, business dynamism and innovation capability.