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- The US is no longer the most economically competitive country in the world.
- That’s according to the World Economic Forum, which has been assessing economic competitiveness for the past 40 years, looking at how “institutions, policies, and factors” determine levels of productivity of a country.
- Singapore took the top spot after benefiting from trade reroutes as a result of the US-China trade war.
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America is no longer the most competitive economy in the world. Instead, it’s Singapore leading the way.
That’s according to the World Economic Forum, which has been assessing economic competitiveness for the past 40 years.
In a 666-page report released Wednesday, the WEF assessed 141 countries. It uses 114 indicators looking at how institutions, policy, and other factors influence levels of productivity in a country.
The US came in second, Japan was sixth, Germany was seventh, and the UK came in ninth place, while Argentina came in 83rd.
Southeast Asia has had large amounts of trade running through it during the US-China trade war as Chinese exporters seek ways of rerouting products to the US via countries like Vietnam and Singapore.
Those two countries were among those the WEF said had benefited “from global trade tensions through trade diversion,” with Singapore leapfrogging the US from second to first and Vietnam finishing as the most improved country in the WEF rankings.
At the same time, the US has been hurt by the turmoil, with the WEF saying: “Escalating trade and geopolitical tensions are fuelling uncertainty. This holds back investment and increases the risk of supply shocks: disruptions to global supply chains, sudden price spikes or interruptions in the availability of key resources.”
“The world is at a social, environmental and economic tipping point,” the report added, saying “subdued growth, rising inequalities, and accelerating climate change provide the context for a backlash against capitalism, globalization, technology, and elites.”
The Asia-Pacific region took the crown as the world’s most competitive region, the WEF said.
The WEF report found the global economy plagued by low productivity since the financial crash — despite its calculations of a $10 trillion cash injection from central banks.
The WEF also criticized governments as not implementing fiscal policy to drive growth.
“While the $10 trillion injection by central banks is unprecedented, and has succeeded in averting a deeper recession, it is not enough to catalyze the allocation of resources towards productivity enhancing investments in the private and public sectors,” the WEF said.
It added: “As monetary policies begin to run out of steam, it is crucial for economies to rely on fiscal policy and public incentives to boost research and development, enhance the skills base of the current and future workforce, develop new infrastructure and integrate new technologies.”
World Economic Forum
