IRELAND HAS fallen four places to 29th in terms of global competitiveness and its banking system is the least sound of the 139 countries surveyed, according to the World Economic Forum.
Switzerland remains the world’s most competitive economy, the Geneva-based forum’s Global Competitiveness Report 2010/2011 finds.
Ireland was placed 25th in last year’s survey, a fall of three places on the previous 12 months. It is now rated between Brunei and Chile, two places behind China and two places ahead of Iceland, which dropped five places in the latest rankings.
The report said Irelands decline is “attributable to a weakening macroeconomic environment as well as continuing concerns related to financial markets”. Economic stability in Ireland plummeted from seventh two years ago to 45th last year and 95th in the current survey.
Under the category of “soundness of banks”, Ireland ranks last of the 139 countries, while it achieves a lowly 117th for ease of access to loans. Despite this, the strength of investor protection in Ireland is reported as being the fifth best in the world.
The Government’s budget balance is rated 130th, and the flexibility of wage determination is just 128th of the countries surveyed. The most problematic factors for those doing business in Ireland are listed as access to financing and inefficient government bureaucracy.
Despite these poor ratings, the report says Ireland continues to benefit from a number of strengths, including an “excellent health and primary education” system, which is ranked 10th of the countries surveyed. The country also has strong higher education and training (23rd), and well-functioning goods and labour markets, which are ranked 14th and 20th, respectively.
These factors have “fostered a sophisticated and innovative business culture” which sees Ireland ranked 20th for business sophistication and 22nd for innovation. Ireland’s infrastructure has also improved, jumping from 52nd place into 33rd.
The United States has fallen from second to fourth place after losing the top spot last year, with Sweden and Singapore leapfrogging it into second and third place respectively.
Germany, which climbed from seventh to fifth, is the highest-ranked country in the euro zone. Japan, Finland, the Netherlands, Denmark and Canada make up the rest of the top 10. The UK is in 12th place, France is rated 15th and Russia is in 63rd spot.
Greece is regarded as the least competitive of the 27 European Union member states, with its “dismal performance” this year seeing it slip 12 places to 83rd.
Its banking system is in 70th place, while Iceland’s is in 137th and Ukraine’s is just ahead of Ireland’s in 138th.
The lowest-rated countries overall of the 139 listed are Zimbabwe, Burundi, Angola and Chad.
The rankings are based on a dozen measures of competitiveness, including institutions, infrastructure, health and education, market size and the macroeconomic environment.
