Conference nyoss1::market_investing

913.0. "US - The most competitive economy" by SOLVIT::CHEN () Mon Sep 11 1995 10:22

Subject: U.S. top, Japan plunges in world competition league

	 GENEVA (Reuter) - The United States, powered by
newly-aggressive industry, is easily the world's most
competitive economy but a vibrant Singapore is hot on its heels,
an authoritative study said Tuesday.
	 With the two leaders pulling away from the rest, Hong Kong
comes in third, but Japan has dropped into fourth place due to
its economic woes and a general crisis of confidence, according
to the annual World Competitiveness Report.
	 The report, whose assessments are widely used around the
globe as a guide for business and investment, is issued by the
Lausanne International Institute for Management Development
(IMD) and the Geneva-based World Economic Forum.
	 The gap between a resurgent United States, which recaptured
the lead in 1994, and a declining Japan which had previously
held the top competitivity spot for nine years, ``is widening
even more,'' the wide-ranging study said.
	 Switzerland, in fifth place, leads European countries in a
league table covering the world's top 48 economies. Included for
the first time, China comes in at 34th and Russia is last.
	 Competitiveness in Asia in general, the report said, was
booming with China and India showing tremendous potential. ``The
dynamism of East Asia remains staggering,'' it added with Hong
Kong strong and Taiwan surging from 18th to 11th in the table.
	 Malaysia came in 21st, with South Korea 24th, Thailand 26th,
Indonesia 33rd and the Philippines 35th, underlining, the report
said, ``the more difficult task of developing the
competitiveness of heavily-populated countries.''
	 Latin America was moving strongly into the competitivity
scene through Chile (20), Argentina (29th), Peru (32nd) and
Colombia (36th). But South Africa, the only sub-Saharan African
country in the league, dropped from 35th to 42nd place.
	 Compilers of the study defined international competitiveness
as the ability of a country ``to proportionally generate more
wealth than its competitors in world markets'' and this year
tapped the views of 3,292 top executives around the globe.
	 The assessments are based on eight factors, from domestic
economic strength through government policies affecting
competitivity to infrastructure and people, or the availability
and qualifications of a country's human resources.
	 IMD Professor Stephane Garelli, director of the project,
said the U.S. revival had three prime sources.
	 These were ``strong resilience in the economy thanks to
deregulation and privatization programs, leadership in new
technologies -- such as computers, telecommunications,
bio-engineering -- and services, and strict control on the
operating costs of enterprises, in particular labor costs.''
	 The ``aggressiveness of (U.S.) industry'' was especially
noticeable in the new technology area, the report said.
	 Garelli warned the U.S. model ``has a high social cost, with
the risk of destabilizing certain sectors of society, especially
the lower and the lower middle classes.'' It also suffered from
poor secondary education and work attitudes.
	 ``Singapore's record offers a blueprint for other developing
countries on how to succeed,'' the report said. Although poor in
natural resources, the island state which was also in second
place last year built its economic miracle ``on its talented
people and pro-trade government policies.''
	 Japan's decline, it said, ``seems to be socially rather than
just economically related, which means that the challenge will
lie in the country's ability to reform itself.''
	 Western European countries, Garelli said, showed a
``disquieting divergence'' in the competitive structure of their
economies, underlining the problems faced by the 15 members of
the European Union in economic integration.
	 Germany ranked sixth, the Netherlands seventh and Denmark
ninth in the league. But France stood 17th and Britain 18th
while among southern EU members Spain was in 28th position,
Italy 30th and Portugal 31st, with Greece a poor 43rd.