Economy, Domestic Economy

World Economic Forum: Iran 76th in Global Competitiveness

World Economic Forum: Iran 76th in Global Competitiveness
World Economic Forum: Iran 76th in Global Competitiveness

The latest report by World Economic Forum titled “The Global Competitiveness Report 2016–2017” shows Iran’s Global Competitiveness Index has slipped by two notches compared to the previous report for the country to stand at 76th position.

The new WEF provides an overview of the competitiveness performance of 138 economies over 114 indicators that capture concepts that impact productivity. These indicators are grouped into 12 main categories:

Institutions: The institutional environment of a country depends on the efficiency and behavior of both public and private stakeholders. Iran ranked 90th in this sector compared to its previous standing of 94th.

Infrastructure: Extensive and efficient infrastructure is critical for ensuring the effective functioning of the economy. Iran has been ranked 59th in this year’s study, whereas its prior place was 63.

Macroeconomic Environment: The stability of macroeconomic environment is important for business and, therefore, is significant for the overall competitiveness. Iran’s position in this sector is 72 whereas its last year’s standing was 66.

Health and Primary Education: A healthy workforce is vital to a country’s competitiveness and productivity. Iran ranked 49th compared to last year’s 47th.

Higher Education & Training: Top quality higher education and training are crucial for economies that want to move up the value chain beyond simple production processes and products. Iran has been ranked 60th in this regard while its last year’s place was 69th.  

Goods Market Efficiency: Countries with efficient goods markets are well positioned to produce the right mix of products and services given their particular supply-and-demand conditions, as well as to ensure that these goods can be most effectively traded in the economy. Iran ranks 111th compared to its last year’s place of 109th.

Labor Market Efficiency: The efficiency and flexibility of the labor market are critical for ensuring that workers are allocated to their most effective use in the economy and provided with incentives to give their best effort in their jobs. Iran’s performance in this regard has been dismal: 134th among 138 countries. Last year, Iran occupied the 138th spot out of 140 countries.

Financial Market Development: An efficient financial sector allocates the resources saved by a nation’s population, as well as those entering the economy from abroad, to the entrepreneurial or investment projects with the highest expected rates of return rather than to the politically connected. Here, Iran ranked 131 over last year’s 134.

Technological Readiness: The technological readiness pillar measures the agility with which an economy adopts technologies to enhance the productivity of its industries. Iran has ranked 97th compared to last year’s 99th.

Market Size: The size of the market affects productivity since large markets allow firms to exploit economies of scale. Given Iran’s population and its relatively high GDP, the country has registered one of its best performances in this area by ranking 19th. Its rank has remained unchanged compared to a year before.

Business Sophistication: Business sophistication concerns two elements that are intricately linked: the quality of a country’s overall business networks and the quality of individual firms’ operations and strategies. Iran has ranked 109th in this area. Its last year’s rank was 110.

Innovation: The final pillar of competitiveness focuses on technological innovation. Iran is placed 89th over last year’s 90th spot.

Switzerland and Yemen were ranked the most and the least competitive countries respectively.

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