Vietnam - Vietnam downgraded in competitiveness index

Global Competitiveness Report (GCR) 2011 – 2012 announced by the World Economic Forum (WEF) ranked Vietnam at the 65th position on a total of 142 countries surveyed. The country dropped six spots from last year.

Losing points in 10 of the 12 indicators considered by WEF, Vietnam gained single visible progress on only the macroeconomic environment (ranking at the 65th position, advancing 20 places against the rank last year).

WEF showed more pessimistic view of Vietnam’s two-digit surging inflation situation currently.

In addition, high state budget deficit ratio (6 per cent in 2010) and substandard infrastructure continue to be the major concerns of experts to Vietnam (road infrastructure ranked at No 123 and port at No 111). The quality of education, despite gaining significant progresses from last year, was still ranked in the low average group.

Source: WEF

Administrative procedures continue to be major barriers for investors to enter Vietnam’s market as they have experienced averagely about 44 days with nine procedures to get business licenses. In these two targets, Vietnam was ranked at the 119th and 94th respectively.

WEF also advised Vietnam to improve a variety of other weaknesses such as intellectual property rights (ranked at the 127th) or ability to fight against corruption to get higher ranks in the coming years.

According to data published by WEF, Vietnam’s population by the end of 2010 reached about 89 million people and a gross national income of about $103.6 billion, equivalent to 0.37 per cent of global GDP. The average income per capita reached $1,174 a year. This figure is considered a major step in recent years to help Vietnam enter the middle-income threshold.

Source: WEF

However, according to WEF’s statistics in the past 25 years, the income difference of Vietnamese with the average income of the developing countries in Asia has been becoming bigger. In 1985, the income of Vietnamese labourer was almost equivalent to countries with the same level of development in Asia (around $400 – 500 according to the forex rate at the time). If remaining this forex rate, the income of Vietnamese people is lower than the average of other developing economies in Asia by $2,000.

WEF’s GCR 2011-2012 was conducted basing on the survey over 142 countries and territories, increasing four countries and territories from previous year. All these four new surveyed members were ranked below Vietnam.

This year, Switzerland continued to lead on favourable levels for economic activities. Singapore overtook Sweden to be at the second position. Finland jumped from the seventh position last year to the fourth meanwhile the US was downgraded to the fifth place. Remaining positions in the top ten included Germany, Netherlands, Demark, Japan and UK.

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