Brunei jumps 7 places in competitiveness ranking ‘World No 1 in macroeconomic stability’

BRUNEI Darussalam jumped to number 32 out of 133 countries or
economies covered in The Global Competitiveness Report 2009-2010,
released on September 8, 2009 by the World Economic Forum ahead of its
Annual Meeting of the New Champions 2009 in Dalian. Last year, Brunei
Darussalam was ranked 39 out of 134 countries and economies.

Brunei is now ranked No 1 in terms of macroeconomic stability replacing Kuwait.

The seven-step rise from number 39th last year to 32nd in the
country’s competitiveness ranking that was published in this year’s
Global Competitiveness Report [GCR] is indeed a cause for celebration.

This was the response of Pehin Orang Kaya Utama Dato Seri Setia Haji
Yahya bin Begawan Mudim Dato Paduka Haji Bakar, Minister of Industry
and Primary Resources, who was speaking on behalf of the Ministry of
Industry and Primary Resources, as the partner institute of the World
Economic Forum’s Global Competitiveness Network (GCN) in Brunei

Looking at the 12 pillars of the Global Competitiveness Index (GCI),
Pehin Dato Yahya noted that Brunei has shown improvements in nine out
of the 12 pillars.

It recorded improvements in the following pillars: Institutions,
Macroeconomic Stability, Health and Primary Education, Higher Education
and Training, Labour Market Efficiency, Financial Market
Sophistication, Market Size, Business Sophistication and Innovation. It
showed decline in the following pillars: Infrastructure, Goods Market
Efficiency and Technological Readiness.

According to the report, Brunei’s top rank in macroeconomic
stability is due to “a hefty budget surplus equivalent to one third of
its GDP (4th highest), high savings (2?), and controlled inflation (2.7
per cent, 6th lowest)”.

And among the 8 Asean member countries, Brunei Darussalam has risen
to No 3 from last year’s fourth position in the overall GCI rankings.
The country is just behind Singapore and Malaysia.

Pehin Dato Yahya opined that this year’s positive results are a
reflection of His Majesty’s leadership in enhancing the country’s
competitiveness and advancing the objectives of economic
diversification. The result is also a recognition of the cooperation
between government ministries and other relevant stakeholders in the
business community towards improving the various pillars of
competitiveness in the midst of the many difficulties and challenges
that the country is facing.

The minister also said that since the publication of last year’s
GCR, MIPR and other government ministries have discussed various issues
that could strengthen the country’s competitiveness. While the positive
results this year are cause for celebration, Pehin Dato Yahya expressed
caution about Brunei’s improved rankings. He said that Brunei’s
improved ranking in the GCI may also be due to the preoccupation of
other countries at diverting most of their resources at easing the
impact of global economic crisis in their respective countries and very
little resources were devoted towards building their competitiveness

Brunei Darussalam was relatively shielded from the full impact of
the global economic crisis and was able to implement the different
development programmes. But as the economic recovery goes into full
swing, the minister noted that other countries will also endeavour to
strengthen their competitiveness. And the GCI will continue to be an
invaluable benchmarking tool for measuring the levels of
competitiveness of an economy against the others.

However, while recognising that GCI has been an invaluable
benchmarking tool that will help policy makers and business leaders in
developing their capacities to improve productivity, Pehin Dato Yahya
also cautioned that GCI is a statistical index which, like other
statistical indices, needs to be interpreted according to assumptions
and methodology of the study.

One must therefore be guided by understanding the methodology of the
study in order to take advantage of the statistical indexes being
provided. The GCI is based on 12 pillars and these 12 pillars are
grouped into three sub-indices, namely the Basic Requirements,
Efficiency Enhancers and Innovation and Sophistication Factors.

The report has shown that the country has managed its natural and
other resources well. But to become more competitive and resilient,
Brunei has to improve in the other pillars of competitiveness.

According to the report, “The overall environment is generally not
conducive to doing business. The goods market does not function
efficiently (100th); in particular, the level of competition is
disturbingly low (106th). Furthermore, higher education, technological
readiness (60?‘), business sophistication (77th), financial markets,
and innovation (75?‘) all exhibit major shortcomings. Addressing and
overcoming these challenges is a condition that must be met to further
widen the economic base beyond oil and gas, which together account for
half of Brunei’s GDP.”

Thus, MIPR and other government ministries will continue working
together at improving the various elements that need to be reformed in
order to consistently improve the country’s level of competitiveness
and achieve the goals of economic diversification.

Overall, Switzerland tops the overall ranking this year, replacing
the United States. The decline of the United States to second position
was attributed to the weakening of its financial markets and
macroeconomic stability. Singapore, Sweden and Denmark round out the
top five. European economies continue to prevail in the top 10 with
Finland, Germany and the Netherlands following suit.

The United Kingdom, while remaining very competitive, has continued
its fall from last year, moving down one more place this year to 13th,
mainly attributable to continuing weakening of its financial markets.
The People’s Republic of China continues to lead the way among large
developing economies, improving by one place this year, solidifying its
position among the top 30. Among the three other large BRIC economies,
Brazil and India also improve, while Russia falls by 12 places. Several
Asian economies perform strongly with Japan, Hong Kong SAR, Republic of
Korea and Taiwan, China also in the top 20. In Latin America, Chile is
the highest ranked country, followed by Costa Rica and Brazil.