Photo: Shutterstock
Israel 24th in economic performance, up from 36th place in 2012 (illustration)
Photo: Shutterstock

Israel ranks 19th in competitiveness

IMD World Competitiveness ranking points to rise in country's economic performance, drop in business efficiency, failure to improve in government efficiency and infrastructure

Israel's economic performance improved this year, according to the World Competitiveness index for 2013 released Thursday by the International Institute for Management Development (IMD), which ranked the country in the 24th place – up from the 36th place in 2012.


Yet the Israeli economy's overall competitiveness ranking is not as encouraging: The country maintained the 19th place out of 60 developed countries.


The criteria used to compute the World Competitiveness rankings are grouped into four main factors: The country's economic performance, government efficiency, business efficiency and infrastructure.


US 1st in competitiveness

IMD is one of the most esteemed research institutes in the world, which examines the competitiveness of national economies once a year, based on different criteria. It is represented in Israel by the Federation of Israeli Chambers of Commerce.


This year's overall ranking is topped by the United States, Switzerland, Hong Kong, Sweden, Singapore and Norway. The countries at the bottom of the list include Venezuela, Argentina, Croatia, Jordan, Bulgaria and Romania.


Economic performance: Employment improved

The term "economic performance," according to the Swiss institute, is comprised of five sub-factors: Employment (where Israel recorded an improvement compared to 2012 – from 28th place to 10th place), international investment (up from 29th place to 24th place), prices, which includes parameters related to inflation and cost of living (Israel recorded an improvement here too, but is still in the unflattering 40th place), international trade (up four spots to the 39th place), and domestic economy – GDP, expenditures and growth (Israel maintains the 27th place from 2012).


Business efficiency: Drop in finance

In business efficiency, Israel slid six spots from the previous year. In the productivity and efficiency sub-factor, Israel fell 30 spots to the 51th place.


The finance sub-factor (which examines bank efficiency, stock market efficiency and finance management) is unflattering for Israel as well, with a drop of 11 spots to the 30th place.


In management practices, Israel fell five spots to the 28th place.


Infrastructure: No improvement

Another parameter comprising a country's economic strength is the infrastructure system, where Israel failed to improve its position compared to 2012, maintaining the 13th place. The basic infrastructures in Israel (roads, energy, etc.) are not a source of the price for the country, leaving it in the unflattering 48th place.


Technological and scientific infrastructure improved this year, with Israel ranking among the five top countries. The health and environment infrastructures improved slightly (from the 21st place to the 20th place), as did the education infrastructure (from the 13th place to the 11th place).


Government efficiency: No change

What about government efficiency, which has been criticized by many in the country? According to the report, there appears to be no significant change as Israel's government efficiency maintains the 21st place out of the 60 economies examined.


According to Uriel Lynn, president of the Federation of Israeli Chambers of Commerce, "The results of the IMD index present a tremendous achievement for the economy in the past decade, but include two huge writings on the wall: A low participation rate in the workforce and destructive Knesset legislation along with regulation against the business sector.


"In addition, unwillingness to open up to competition and face the cost of living problem serve as a main obstacle in the continued development of the economy."


According to Lynn, "The business sector is forced to deal with trends that will negatively affect the entrepreneurship and business building motivation. We are talking, among other things, about corrupt bureaucracy in government ministries; heavy costs imposed on the business sector by the state-owned absolute monopolies like the local authorities, Israel's seaports, the Electric Corp; a growing trend of criminalization in the business management area; heavy damage to the basic rights of employers, and other trends."  



פרסום ראשון: 05.30.13, 14:38
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