Thailand drops narrowly in competitiveness index
The World Economic Forum recently released its Global Competitiveness Index (GCI) rankings, covering 140 of the world’s nations. Thailand came in at 32nd, which meant it had dropped by one place overall from its 2014 ranking.
The survey was conducted between February and May this year and one of the reasons for Thailand’s drop was its weak macroeconomic development. In fact, Thailand’s poor macroeconomic numbers saw it fall from 19th place in 2014 to 27th.
Despite the slight fall, there were a number of areas where Thailand’s performance has improved. For example, in innovation development Thailand jumped 10 places from 67th to 57th. In technological readiness Thailand now ranks at 58th, up from last years’ 65th position.
As well, Thailand rates in the world’s top 30 countries for the size of its foreign market, the development of its equities market, rules and regulations for foreign direct investment (FDI) and export value to GDP.
Thailand improved its rankings for infrastructure, higher education and training, technological readiness, and business sophistication.
The survey examines 12 key pillars which are divided into three sections: basic requirements, efficiency enhancement, innovation and sophistication. Each section is given a weighting based on its relative importance, and while Thailand did well in the areas mentioned above, these were not regarded as carrying the weight needed to see the country improve its overall ranking.
Nonetheless, Thailand’s ranking when compared with its Asean neighbours shows it in third position overall, albeit quite some way behind the likes of Singapore, which ranks number two in the world (behind the number one ranked Switzerland) and Malaysia, which jumped from 20th place in 2014 to 18th this year.
Indonesia also dropped this year, falling to 37th place from 34th last year. What is significant, at least as far as what may happen over the next decade or so, is that Thailand’s neighbours Cambodia, Laos and Vietnam all improved their CGI positions quite substantially.
Cambodia jumped from 95th to 90th, Laos is up to 83rd from 93rd, and Vietnam is 56th, up from 68th in 2014. The Philippines also moved up, from 52nd to 47th position.
In a general sense, the CGI found government instability in Thailand to be a major challenge and was an obstacle to doing business here. It did note that corruption has been on the wane, with the public sector scoring better than previously.
The bottom line for Thailand is that it needs to maintain its focus on developing infrastructure, especially the logistics network, linking road, rail and air routes to reduce costs for operators.