Global Competitive Index

Of
The Caribbean
(West Indies)

Submitted By:

Abhishek Dey
MBA (IB) Section: A
Reg. No: 1226110103
 NATURE OF COMPETITIVENESS

•  Competitiveness can be examined at 3 levels:

Enterprise/firm: the ability to produce/market products of
superior quality and lower costs than those offered by
domestic/international producers
Sector/industry: the extent to which the sector/industry offers
potential for growth and to attract a good return on investment
National/country: the extent to which the business environment
is conducive to growth/development thus enhancing the capacity
of the economy to improve the standard of living on a sustainable
basis.

Competitiveness refers to the ability of the enterprise, industry,

country to produce and sell goods and services in
domestic/foreign markets at prices and with the quality that
ensure long-run viability and sustainability.
•  Several measures of competitiveness (at the international level):
–  Export market share, export growth, profitability
–  Cost competitiveness, productivity, technology indicators, price
competitiveness, access to resources, quality competitiveness.
–  Real effective exchange rate, growth rate of per capita income,
composite indices.

The Global Competitiveness Index/Report focuses mainly on

national competitiveness using a set of composite indices. There
is concern with the issues of dynamic comparative advantage
and technological dynamism.

The Report looks at the main factors influencing national

competitiveness – quality of the macro-environment, the quality
of public institutions and technology/innovation-a greater
emphasis is placed on the micro issues of competitiveness.
The Competitiveness of countries is based on 12 pillars
Basic Requirements
•  Institutions
•  Infrastructure
•  Macroeconomic stability
•  Health and primary education

Efficiency Enhancers
•  Higher education and training
•  Goods market efficiency
•  Labor market efficiency
•  Financial market sophistication
•  Technology readiness
•  Market size

Innovation & Sophistication

•  Business sophistication
•  Innovation
These pillars are used to rank the relative competitiveness of
countries. Qualitative information ( Executive Opinion Surveys) is
used to supplement quantitative information on a country’s
competitiveness.
Competitiveness is “a means to an end”
Benefits include – increased exports, output growth, income,
employment, economic welfare/standard and quality of life.

Productivity enhancement along with the pillars above are critical

to improved competitiveness.
The World Economic Forum (WEF) considers competitiveness as “
a set of factors, policies and institutions which determine the level
of productivity
of a country”. Usually we see productivity growth as
reducing unit costs of production thus leading to
improved competitiveness.

Global Competitiveness Index –

(Caribbean Results)

Stage approach to Development underlies the Report:

Guyana – factor driven stage of development (2009)
Jamaica – transition from factor to efficiency stage
(2009)-a regression from previous years
Barbados – transition from efficiency to innovation stage of
development (2009)
Trinidad and Tobago – innovation stage of development (2009) –
advance from previous

GLOBAL COMPETITIVENESS INDEX- RANKING

Country 2007/07 2007/08 2008/09 2009/10

Barbados 41 50 47 44

Jamaica 67 78 86 91

Trinidad &
Tobago 76 84 92 88

Suriname 104 113 103 102

Guyana 113 126 115 104

Source: World Economic Forum
UNIDO’s Competitive Industrial Performance Index - Ranking
 COUNTRY 1993 1998 2003 2005
Barbados 57 51 50 59
Jamaica 68 74 77 77
St. Lucia 82 107 88 -
Trinidad & 50 40 52 78
Tobago
Source: UNIDO Website

•  Barbados has been in the top 50 of the countries in 6 pillars

(2006/7 and 2009/10)
–  Institutions
–  Infrastructure
–  Health/primary education
–  Higher education and training
–  Technological readiness
–  Innovation
•  Trinidad &Tobago has been in the top 50 of all countries in one
pillar – macroeconomic stability (2006/7 and 2009/10) with
financial market sophistication added in 2009/10.

•  All the Caribbean countries were ranked over 100 for market
size reflection their small domestic market sizes— critical nature
of trade and trading agreements for the region.

Business sophistication and innovation were also poorly

performing pillars for the region, along with labour and goods
market efficiency.

•  In terms of the Index of Economic Freedom (2009), Barbados

was the top country in the region with a global ranking of 22.
Trinidad and Tobago was fourth with a global ranking of 41
•  Trinidad and Tobago ranked lowly in terms of the “Ease of
Doing Business” in 2008 and 2009
•  T&T performed better than Barbados in terms of the Degree of
Globalization in 2008
•  There is a relatively high cost of starting a business in Barbados
 Index of Economic Freedom
Country Score Ranking
Barbados 71.5 22
The Bahamas 70.3 27
St. Lucia 68.8 39
Trinidad & Tobago 68.0 41
Jamaica 65.2 52
St. Vincent 64.3 60
Belize 63.0 66
Suriname 54.1 125

Ranking based on Ease of Doing Business

Country 2008 2009
Antigua & Barbuda 41 42
Trinidad & Tobago 67 80
Belize 59 78
Dominica 77 74
Grenada 70 84
Guyana 104 105
Jamaica 63 63
St. Kitts & Nevis 64 67
St. Lucia 34 34
St. Vincent 54 66
Suriname 142 146
Source: World Bank: Doing Business in Small Developing States, 2008, 2009
Conclusion:
Main factors to consider which have a bearing on “country
competitiveness” are:
–  Investment in education/training and health (i.e., the human
capital of the country) – universal secondary level education; free
education to tertiary level; training in TVET; polyclinic system;
drug service, etc. Challenges still remain in relation to the “new
economy” re; the quality and quantity of the output of secondary
and post secondary system.
–  Good governance and administration – smooth transitions in
administration of government, well qualified civil servants, little
difference in political ideology, regular legislative reporting. Some
reform and strengthening is need to reduce transactions costs.
–  Social stability – relatively low incidence of crime, active NGOs,
vibrant call-in programs, free press, no serious racial/ethnic
divide. Need to address erosion of social capital.
–  Social partnership – Government, labor unions and private
sector since early 1990s – Productivity Council, Protocols, regular
consultations and meetings. Need to widen and strengthen the
Partnership.
Relatively small informal sector compared with other Caribbean
countries suggesting a less restrictive business environment. Need
to foster entrepreneurial activity and innovation for exports.
–  General macroeconomic stability – fixed exchange rate with
USA since mid 1970s, free flow of economic data, sound choice of
economic policies, financial services
–  Reliance on remittances, financial services and tourism to
supplement other areas of production. Greater use of the
Diaspora is needed: —Skills, Markets, Investment, Remittances,
Lobbying/Advocacy
–  Generally well-functioning institutions – legal, economic, social
and political and infrastructure –telecoms, electricity, water,
roads, ports etc. Need for Greater efficiency and lower costs
–  Consistent Development planning over the years—visioning,
targeting, monitoring etc unlike other countries. A National
Planning Agency should be considered