Israel ranks 17th out of 58 of the world's most economically developed nations, according to IMD's World Competitiveness Yearbook rankings. The Swiss research institute's 2010 report showed that Israel climbed seven steps up from its 2009 ranking.
The institute examines the level of developed nations' competitiveness based on some 330 different parameters.
The Federation of Israel's Chambers of Commerce, which represents IMD in the Jewish state, stressed that the leap in Israel's rank stems from its economy's stability and its ability to weather financial crises, as could be seen in the passing year, compared to other countries.
Singapore topped the list, and was up two steps from 2009. Hong Kong and the United States came in second and third respectively, and Romania, Argentina, Croatia and Venezuela made the bottom of the list.
Israel was also ranked first in several of the index's sub-categories. The Israeli economy was deemed the most durable in the face of crises, and came in first place in the rate of investments in research and development centers.
The Bank of Israel also received high marks and was ranked first among central banks for its efficient functioning, after receiving 8th place in 2009.
Despite the fear of a brain drain, Israel also leads in its supply of skilled manpower.
'Minimize government spending'However, there are also categories in which Israel is far behind other developed countries. With regards to participation in the workforce, Israel's low rates put it in 54th place. In the category of the rate of citizens which receive stipends, Israel ranked 56th place.
Israel, which is considered one of the most expensive countries, ranked 46th place in terms of the cost of living.
In the field of inflationary pressures, Israel dropped seven steps to the 50th place. Israel's sharpest decline came in the field of employment, as it plummeted 11 places to the 37th place.
The IMD institute published a series of recommendation Israel may apply to improve its standing in the coming years. Among other things, the Swiss institute suggested Israel should cut back on its public sector, minimize government spending, reduce the burden on the business sector and work to bridge the gaps between the center and the periphery by improving infrastructure, investing in education, and supporting initiatives.
"The IMD is an independent organization that operates without any political considerations. Its conclusions are no less important than the conclusions of the OECD, and are more applicable to Israel's economic and social state," said Uriel Linn, president of the Federation of Chambers of Commerce in response to the report.
He added, "It should be noted that Israel's ranking first in terms of the market's durability in the face of crises is the direct result of the Treasury and the Bank of Israel's actions, which withstood the pressures and did not pump funds into failing organizations and financial systems as the US and Europe did."