Government and political instability cited as key factors in Nepal's poor ranking in Global Competitiveness Report 2010.
Nepal ranks 130th among the 139 countries in the Global Competitiveness Report 2010-2011. The annual report is released by the World Economic Forum based in Geneva, Switerland.
DATA ON NEPAL
GDP (PPP) per capita (int'l $), 1980–2009
Global Competitiveness Index
Rank (Out of 139) Score (1-7)
GCI 2010–2011.......................................................130 ......3.3
GCI 2009–2010 (out of 133)................................................125 ........3.3
GCI 2008–2009 (out of 134)................................................126 ........3.4
Basic requirements...........................................................125 ........3.5
1st pillar: Institutions .........................................................130 ........3.0
2nd pillar: Infrastructure...................................................139 ........1.8
3rd pillar: Macroeconomic environment .........................86 ........4.4
4th pillar: Health and primary education .......................109 ........4.8
Efficiency enhancers........................................................131 ........3.1
5th pillar: Higher education and training.......................131 ........2.6
6th pillar: Goods market efficiency.................................122........3.6
7th pillar: Labor market efficiency ..................................126 ........3.6
8th pillar: Financial market development.......................106 ........3.6
9th pillar: Technological readiness.................................134........2.5
10th pillar: Market size......................................................100 ........2.9
Innovation and sophistication factors ..........................133 ........2.7
11th pillar: Business sophistication................................132 ........3.0
12th pillar: Innovation........................................................137 ........2.3
The Global Competitiveness Index in detail
6th pillar: Goods market efficiency
6.01 Intensity of local competition ................................................108
6.02 Extent of market dominance.................................................136
6.03 Effectiveness of anti-monopoly policy ..................................107
6.04 Extent and effect of taxation...................................................70
6.05 Total tax rate*..........................................................................61
6.06 Number of procedures required to start a business* .............57
6.07 Time required to start a business*..........................................95
6.08 Agricultural policy costs.........................................................122
6.09 Prevalence of trade barriers ..................................................109
6.10 Trade tariffs*..........................................................................131
6.11 Prevalence of foreign ownership ..........................................135
6.12 Business impact of rules on FDI ...........................................110
6.13 Burden of customs procedures.............................................117
6.14 Degree of customer orientation ..............................................91
6.15 Buyer sophistication ..............................................................123
Nepal ranks 130th among the 139 countries in the Global Competitiveness Report 2010-2011. The annual report is released by the World Economic Forum based in Geneva, Switerland.
Survey data on business environment in Nepal shows that respondents feel government instability is the most problematic factor for doing business (21.8 percent). Other factors cities included corruption (12.1), political instability (11.5), inefficient government bureaucracy (10.4), inadequate supply of infrastructure (8.9), restrictive labor regulations (7.9), poor work ethic in national labor force (6.7), inadequately educated workforce (4.8), inflation (3.8), crime and theft (3.5), access to financing (3.2), tax regulations (1.9), foreign currency regulations (1.3), poor public health (1.1), and tax rates (1.0).
Nepal also ranks at the bottom in technological readiness: availability of latest technologies (128), firm-level technology absorption (129), FDI and technology transfer (128), Internet users (129), broadband Internet subscriptions (106) and Internet bandwidth (130).
Other South Asian countries included in the ranking perform better: Bangladesh (107), India (51), Pakistan (123), Sri Lanka (62).
Nepal is among the bottom 10 countries. Countries that follow Nepal are Mozambique (131), Mali (132), Timor-Leste (133), Burkina Faso (134), Mauritania (135), Zimbabwe (136), Burundi (137), Angola (138), and Chad (139).
The top ranking countries include Switzerland (1), Sweden (2), Singapore (3), United States (4), Germany (5), Japan (6), Finland (7), Netherlands (8), Denmark (9), and Canada (10).
The WEF said in a release that China (27th) continues to lead the way among large developing economies, improving by two more places this year, and solidifying its place among the top 30. Among the three other BRIC economies, Brazil (58th), India (51st) and Russia (63rd) remain stable. Several Asian economies perform strongly, with Japan (6th) and Hong Kong SAR (11th) also in the top 20. In Latin America, Chile (30th) is the highest ranked country, followed by Panama (53rd) Costa Rica (56th) and Brazil.
Several countries from the Middle East and North Africa region occupy the upper half of the rankings, led by Qatar (17th), Saudi Arabia (21st), Israel (24th), United Arab Emirates (25th), Tunisia (32nd), Kuwait (35th) and Bahrain (37th), with most Gulf States continuing their upward trend of recent years. In sub-Saharan Africa, South Africa (54th) and Mauritius (55th) feature in the top half of the rankings, followed by second-tier best regional performers Namibia (74th), Botswana (76th) and Rwanda (80th). Here is the highlights of the report.
“Policy-makers are struggling with ways of managing the present economic challenges while preparing their economies to perform well in a future economic landscape characterized by uncertainty and shifting balances,” said Klaus Schwab, Founder and Executive Chairman of the World Economic Forum. “In such a global economic environment, it is more important than ever for countries to put into place the fundamentals underpinning economic growth and development.”
Xavier Sala-i-Martin, Professor of Economics, Columbia University, USA, and co-author of the report, added: “Amid concerns about the outlook for the global economy, policy-makers must not lose sight of long-term competitiveness fundamentals amid short-term challenges. For economies to remain competitive, they must ensure that they have in place those factors driving the productivity enhancements on which their present and future prosperity is built. A competitiveness-supporting economic environment can help national economies to weather business cycle downturns and ensure that the mechanisms enabling solid economic performance going into the future are in place.”
The Global Competitiveness Report’s competitiveness ranking is based on the Global Competitiveness Index (GCI), developed for the World Economic Forum by Sala-i-Martin and introduced in 2004. The GCI is based on 12 pillars of competitiveness, providing a comprehensive picture of the competitiveness landscape in countries around the world at all stages of development. The pillars are: institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication, and innovation.
The rankings are calculated from both publicly available data and the Executive Opinion Survey, comprehensive annual survey conducted by the World Economic Forum together with its network of Partner Institutes (leading research institutes and business organizations) in the countries covered by the study. This year, over 13,500 business leaders were polled in 139 economies. The survey is designed to capture a broad range of factors affecting an economy’s business climate. The report also includes comprehensive listings of the main strengths and weaknesses of countries, making it possible to identify key priorities for policy reform.
The report contains an extensive data section with a detailed profile for each of the 139 economies featured in the study, providing a comprehensive summary of the overall position in the rankings, as well as data tables with global rankings for over 110 indicators.
This year’s report also features discussions on selected regions and topics. These include an analysis of the competitiveness of the European Union countries (guest-authored by European Commissioner Joachim Almunia); a review of Latin America’s infrastructure challenges, with a special focus on Brazil; a timely discussion on the relationship between macroeconomic stability and longer-term competitiveness; and the results of the EU Joint Research Centre’s analysis of the GCI, highlighting the statistical robustness and soundness of the index.
DATA ON NEPAL
Key indicators, 2009
Population (millions).................................................29.3
GDP (US$ billions).....................................................12.6
GDP per capita (US$) ................................................452
GDP (PPP) as share (%) of world total .................0.05
Population (millions).................................................29.3
GDP (US$ billions).....................................................12.6
GDP per capita (US$) ................................................452
GDP (PPP) as share (%) of world total .................0.05
GDP (PPP) per capita (int'l $), 1980–2009
Global Competitiveness Index
Rank (Out of 139) Score (1-7)
GCI 2010–2011.......................................................130 ......3.3
GCI 2009–2010 (out of 133)................................................125 ........3.3
GCI 2008–2009 (out of 134)................................................126 ........3.4
Basic requirements...........................................................125 ........3.5
1st pillar: Institutions .........................................................130 ........3.0
2nd pillar: Infrastructure...................................................139 ........1.8
3rd pillar: Macroeconomic environment .........................86 ........4.4
4th pillar: Health and primary education .......................109 ........4.8
Efficiency enhancers........................................................131 ........3.1
5th pillar: Higher education and training.......................131 ........2.6
6th pillar: Goods market efficiency.................................122........3.6
7th pillar: Labor market efficiency ..................................126 ........3.6
8th pillar: Financial market development.......................106 ........3.6
9th pillar: Technological readiness.................................134........2.5
10th pillar: Market size......................................................100 ........2.9
Innovation and sophistication factors ..........................133 ........2.7
11th pillar: Business sophistication................................132 ........3.0
12th pillar: Innovation........................................................137 ........2.3
The most problematic factors for doing business (% of response)
Government instability/coups .....................................21.8
Corruption.......................................................................12.1
Policy instability.............................................................11.5
Inefficient government bureaucracy.........................10.4
Inadequate supply of infrastructure ............................8.9
Restrictive labor regulations.........................................7.9
Poor work ethic in national labor force ......................6.7
Inadequately educated workforce...............................4.8
Inflation .............................................................................3.8
Crime and theft ................................................................3.5
Access to financing........................................................3.2
Tax regulations ................................................................1.9
Foreign currency regulations........................................1.3
Poor public health...........................................................1.1
Tax rates ...........................................................................1.0
Government instability/coups .....................................21.8
Corruption.......................................................................12.1
Policy instability.............................................................11.5
Inefficient government bureaucracy.........................10.4
Inadequate supply of infrastructure ............................8.9
Restrictive labor regulations.........................................7.9
Poor work ethic in national labor force ......................6.7
Inadequately educated workforce...............................4.8
Inflation .............................................................................3.8
Crime and theft ................................................................3.5
Access to financing........................................................3.2
Tax regulations ................................................................1.9
Foreign currency regulations........................................1.3
Poor public health...........................................................1.1
Tax rates ...........................................................................1.0
The Global Competitiveness Index in detail
INDICATOR RANK/139
1st pillar: Institutions
1.01 Property rights.......................................................................125
1.02 Intellectual property protection .............................................116
1.03 Diversion of public funds.......................................................112
1.04 Public trust of politicians .......................................................130
1.05 Irregular payments and bribes...............................................130
1.06 Judicial independence .............................................................93
1.07 Favoritism in decisions of government officials ......................66
1.08 Wastefulness of government spending ..................................99
1.09 Burden of government regulation .........................................114
1.10 Efficiency of legal framework in settling disputes ................128
1.11 Efficiency of legal framework in challenging regulations ......123
1.12 Transparency of government policymaking.............................98
1.13 Business costs of terrorism ..................................................137
1.14 Business costs of crime and violence...................................130
1.15 Organized crime ....................................................................131
1.16 Reliability of police services ..................................................124
1.17 Ethical behavior of firms........................................................134
1.18 Strength of auditing and reporting standards........................106
1.19 Efficacy of corporate boards .................................................119
1.20 Protection of minority shareholders’ interests ......................126
1.21 Strength of investor protection* .............................................59
1.01 Property rights.......................................................................125
1.02 Intellectual property protection .............................................116
1.03 Diversion of public funds.......................................................112
1.04 Public trust of politicians .......................................................130
1.05 Irregular payments and bribes...............................................130
1.06 Judicial independence .............................................................93
1.07 Favoritism in decisions of government officials ......................66
1.08 Wastefulness of government spending ..................................99
1.09 Burden of government regulation .........................................114
1.10 Efficiency of legal framework in settling disputes ................128
1.11 Efficiency of legal framework in challenging regulations ......123
1.12 Transparency of government policymaking.............................98
1.13 Business costs of terrorism ..................................................137
1.14 Business costs of crime and violence...................................130
1.15 Organized crime ....................................................................131
1.16 Reliability of police services ..................................................124
1.17 Ethical behavior of firms........................................................134
1.18 Strength of auditing and reporting standards........................106
1.19 Efficacy of corporate boards .................................................119
1.20 Protection of minority shareholders’ interests ......................126
1.21 Strength of investor protection* .............................................59
2nd pillar: Infrastructure
2.01 Quality of overall infrastructure .............................................133
2.02 Quality of roads .....................................................................130
2.03 Quality of railroad infrastructure............................................112
2.04 Quality of port infrastructure .................................................125
2.05 Quality of air transport infrastructure ....................................116
2.06 Available airline seat kilometers* ............................................87
2.07 Quality of electricity supply ...................................................139
2.08 Fixed telephone lines* ..........................................................113
2.09 Mobile telephone subscriptions* ..........................................131
2.01 Quality of overall infrastructure .............................................133
2.02 Quality of roads .....................................................................130
2.03 Quality of railroad infrastructure............................................112
2.04 Quality of port infrastructure .................................................125
2.05 Quality of air transport infrastructure ....................................116
2.06 Available airline seat kilometers* ............................................87
2.07 Quality of electricity supply ...................................................139
2.08 Fixed telephone lines* ..........................................................113
2.09 Mobile telephone subscriptions* ..........................................131
3rd pillar: Macroeconomic environment
3.01 Government budget balance* .................................................38
3.02 National savings rate* ...............................................................8
3.03 Inflation*................................................................................130
3.04 Interest rate spread*...............................................................69
3.05 Government debt* ..................................................................79
3.06 Country credit rating*............................................................121
3.01 Government budget balance* .................................................38
3.02 National savings rate* ...............................................................8
3.03 Inflation*................................................................................130
3.04 Interest rate spread*...............................................................69
3.05 Government debt* ..................................................................79
3.06 Country credit rating*............................................................121
4th pillar: Health and primary education
4.01 Business impact of malaria ...................................................109
4.02 Malaria incidence*...................................................................95
4.03 Business impact of tuberculosis ...........................................111
4.04 Tuberculosis incidence* ........................................................100
4.05 Business impact of HIV/AIDS................................................115
4.06 HIV prevalence* ......................................................................82
4.07 Infant mortality* ....................................................................105
4.08 Life expectancy* ...................................................................103
4.09 Quality of primary education .................................................116
4.10 Primary education enrollment rate* ......................................122
4.01 Business impact of malaria ...................................................109
4.02 Malaria incidence*...................................................................95
4.03 Business impact of tuberculosis ...........................................111
4.04 Tuberculosis incidence* ........................................................100
4.05 Business impact of HIV/AIDS................................................115
4.06 HIV prevalence* ......................................................................82
4.07 Infant mortality* ....................................................................105
4.08 Life expectancy* ...................................................................103
4.09 Quality of primary education .................................................116
4.10 Primary education enrollment rate* ......................................122
5th pillar: Higher education and training
5.01 Secondary education enrollment rate* .................................117
5.02 Tertiary education enrollment rate*.......................................119
5.03 Quality of the educational system.........................................116
5.04 Quality of math and science education.................................109
5.05 Quality of management schools ...........................................125
5.06 Internet access in schools.....................................................112
5.07 Local availability of research and training services................132
5.08 Extent of staff training...........................................................137
5.01 Secondary education enrollment rate* .................................117
5.02 Tertiary education enrollment rate*.......................................119
5.03 Quality of the educational system.........................................116
5.04 Quality of math and science education.................................109
5.05 Quality of management schools ...........................................125
5.06 Internet access in schools.....................................................112
5.07 Local availability of research and training services................132
5.08 Extent of staff training...........................................................137
6th pillar: Goods market efficiency
6.01 Intensity of local competition ................................................108
6.02 Extent of market dominance.................................................136
6.03 Effectiveness of anti-monopoly policy ..................................107
6.04 Extent and effect of taxation...................................................70
6.05 Total tax rate*..........................................................................61
6.06 Number of procedures required to start a business* .............57
6.07 Time required to start a business*..........................................95
6.08 Agricultural policy costs.........................................................122
6.09 Prevalence of trade barriers ..................................................109
6.10 Trade tariffs*..........................................................................131
6.11 Prevalence of foreign ownership ..........................................135
6.12 Business impact of rules on FDI ...........................................110
6.13 Burden of customs procedures.............................................117
6.14 Degree of customer orientation ..............................................91
6.15 Buyer sophistication ..............................................................123
7th pillar: Labor market efficiency
7.01 Cooperation in labor-employer relations................................137
7.02 Flexibility of wage determination ..........................................111
7.03 Rigidity of employment* .......................................................114
7.04 Hiring and firing practices........................................................98
7.05 Redundancy costs* ...............................................................111
7.06 Pay and productivity ..............................................................125
7.07 Reliance on professional management .................................120
7.08 Brain drain .............................................................................129
7.09 Female participation in labor force* ........................................70
7.01 Cooperation in labor-employer relations................................137
7.02 Flexibility of wage determination ..........................................111
7.03 Rigidity of employment* .......................................................114
7.04 Hiring and firing practices........................................................98
7.05 Redundancy costs* ...............................................................111
7.06 Pay and productivity ..............................................................125
7.07 Reliance on professional management .................................120
7.08 Brain drain .............................................................................129
7.09 Female participation in labor force* ........................................70
8th pillar: Financial market development
8.01 Availability of financial services .............................................116
8.02 Affordability of financial services...........................................117
8.03 Financing through local equity market ....................................14
8.04 Ease of access to loans...........................................................88
8.05 Venture capital availability......................................................106
8.06 Restriction on capital flows ...................................................115
8.07 Soundness of banks..............................................................117
8.08 Regulation of securities exchanges ......................................111
8.09 Legal rights index* ..................................................................75
8.01 Availability of financial services .............................................116
8.02 Affordability of financial services...........................................117
8.03 Financing through local equity market ....................................14
8.04 Ease of access to loans...........................................................88
8.05 Venture capital availability......................................................106
8.06 Restriction on capital flows ...................................................115
8.07 Soundness of banks..............................................................117
8.08 Regulation of securities exchanges ......................................111
8.09 Legal rights index* ..................................................................75
9th pillar: Technological readiness
9.01 Availability of latest technologies ..........................................128
9.02 Firm-level technology absorption ..........................................129
9.03 FDI and technology transfer..................................................128
9.04 Internet users* ......................................................................129
9.05 Broadband Internet subscriptions* .......................................106
9.06 Internet bandwidth* ..............................................................130
9.01 Availability of latest technologies ..........................................128
9.02 Firm-level technology absorption ..........................................129
9.03 FDI and technology transfer..................................................128
9.04 Internet users* ......................................................................129
9.05 Broadband Internet subscriptions* .......................................106
9.06 Internet bandwidth* ..............................................................130
10th pillar: Market size
10.01 Domestic market size index*..................................................90
10.02 Foreign market size index* ...................................................123
10.01 Domestic market size index*..................................................90
10.02 Foreign market size index* ...................................................123
11th pillar: Business sophistication
11.01 Local supplier quantity...........................................................121
11.02 Local supplier quality .............................................................132
11.03 State of cluster development..................................................86
11.04 Nature of competitive advantage ..........................................119
11.05 Value chain breadth ...............................................................127
11.06 Control of international distribution .......................................113
11.07 Production process sophistication.........................................135
11.08 Extent of marketing...............................................................134
11.09 Willingness to delegate authority..........................................131
11.01 Local supplier quantity...........................................................121
11.02 Local supplier quality .............................................................132
11.03 State of cluster development..................................................86
11.04 Nature of competitive advantage ..........................................119
11.05 Value chain breadth ...............................................................127
11.06 Control of international distribution .......................................113
11.07 Production process sophistication.........................................135
11.08 Extent of marketing...............................................................134
11.09 Willingness to delegate authority..........................................131
12th pillar: Innovation
12.01 Capacity for innovation ..........................................................126
12.02 Quality of scientific research institutions ..............................136
12.03 Company spending on R&D..................................................130
12.04 University-industry collaboration in R&D...............................133
12.05 Gov’t procurement of advanced tech products ....................133
12.06 Availability of scientists and engineers .................................130
12.07 Utility patents per million population*.....................................90
12.01 Capacity for innovation ..........................................................126
12.02 Quality of scientific research institutions ..............................136
12.03 Company spending on R&D..................................................130
12.04 University-industry collaboration in R&D...............................133
12.05 Gov’t procurement of advanced tech products ....................133
12.06 Availability of scientists and engineers .................................130
12.07 Utility patents per million population*.....................................90
Read the full report here.
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