India is world’s 40th most competitive economy: WEF

The Global Competitiveness Index (GCI) is prepared on the basis of country-level data covering 12 categories or pillars of competitiveness.

India has been ranked as the 40th most competitive economy — slipping one place from last year’s ranking — on the World Economic Forum’s global competitiveness index, which is topped by Switzerland.

On the list of 137 economies, Switzerland is followed by the US and Singapore in second and third places, respectively.

In the latest Global Competitiveness Report released today, India has slipped from the 39th position to 40th while neighbouring China is ranked at 27th.

“India stabilises this year after its big leap forward of the previous two years,” the report said, adding that the score has improved across most pillars of competitiveness. These include infrastructure (66th rank), higher education and training (75) and technological readiness (107), reflecting recent public investments in these areas, it added.

According to the report, India’s performance also improved in ICT (information and communications technologies) indicators, particularly Internet bandwidth per user, mobile phone and broadband subscriptions, and Internet access in schools.

However, the WEF said the private sector still considers corruption to be the most problematic factor for doing business in India.

“A big concern for India is the disconnect between its innovative strength (29) and its technological readiness (up 3 to 107): as long as this gap remains large, India will not be able to fully leverage its technological strengths across the wider economy,” it noted.

Among the BRICS, China and Russia (38) are placed above India.South Africa and Brazil are placed at 61st and 80th spots, respectively.

In South Asia, India has garnered the highest ranking, followed by Bhutan (85th rank), Sri Lanka (85), Nepal (88), Bangladesh (99) and Pakistan (115).

“Improving ICT infrastructure and use remain among the biggest challenges for the region: in the past decade, technological readiness stagnated the most in South Asia,” WEF said.

Other countries in the top 10 are the Netherlands (4th rank), Germany (5), Hong Kong SAR (6), Sweden (7), United Kingdom (8), Japan (9) and Finland (10).

The Global Competitiveness Index (GCI) is prepared on the basis of country-level data covering 12 categories or pillars of competitiveness.

Institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication and innovation are the 12 pillars.

According to WEF’s Executive Opinion Survey 2017, corruption is the most problematic factor for doing business in India.

The second biggest bottleneck is ‘access to financing’, followed by ‘tax rates’, ‘inadequate supply of infrastructure’, ‘poor work ethics in national labour force’ and ‘inadequately educated work force’, among others.

The survey findings are mentioned in the report.

“Countries preparing for the Fourth Industrial Revolution and simultaneously strengthening their political, economic and social systems will be the winners in the competitive race of the future,” WEF founder and Executive Chairman Klaus Schwab said.

Medical tourism is forex top spinner

Accounts for 70% of health services exports, finds survey

Medical tourism has been the largest contributor to India’s total health services exports, accounting for 70 per cent of the total revenues of $890 million earned in 2015-16, according to the first comprehensive government survey on the sector.

Asian countries, led by Bangladesh, Iraq, Pakistan and the Maldives, accounted for more than 60 per cent of the foreign exchange earnings of health services.

India’s major trade partners, the US and the EU, accounted for 14 per cent and 11 per cent, respectively, according to the survey compiled by the Directorate-General of Commercial Intelligence and Statistics under the Commerce Department.

■ 60% of the earnings come from Bangladesh, Iraq, Pakistan and the Maldives

■ 14% from the US

■ 11% from the EU

“The personalised services and care that patients in India get is much cheaper than the services offered in developed countries and even in countries in the ASEAN, Middle East and the CIS states,” Commerce Secretary Rita Teaotia noted in her comments.

“This, together with the support of the government in promoting India as a healthcare hub, research in healthcare and advances in information and communication technology have enhanced India’s export of health services,” Teaotia added.

Contract research was second-highest forex earner among health services, accounting for 27 per cent of export revenue. Clinical trials and telemedicine accounted for about 3 per cent of export earnings.

Orthopaedics, oncology, neurology and cardiology are the top four export revenue earners; strikingly, Ayurveda is a close fifth, much above other branches including urology, haematology, general medicine and nephrology.

The report is part of the Commerce Department’s efforts to develop a framework to collect statistics on services trade. The DGCI&S launched its pan-India survey on international trade in services in June 2016.

Along with information on medical and health value travel, the survey also captured information on telemedicine, clinical trials, contract research, distance health education and temporary overseas movement of personnel from the surveyed units.

The survey is likely to be undertaken on an annual basis by DGCI&S.


IMF knowledge sharing center to come up in India

In a first for Asia, the International Monetary Fund (IMF) will set up a knowledge-sharing centre in India, to provide technical support and assistance here and to five other South Asian nations. Their team will extend expertise in core macroeconomic and financial management areas, said an unnamed government source. An agreement is likely to be signed here on Saturday by IMF Managing Director Christine Lagarde with Prime Minister Narendra Modi.

The new IMF centre, being set up amid global economic uncertainty, will provide assistance to India, Nepal, Bangladesh, Sri Lanka, Pakistan and Bhutan. Since the IMF team will be based out of the region, it will ensure better understanding of regional concerns, including trade, agriculture, climate change, facilitating a reform process and support to regional integration. The knowledge centre will come up in the wake of IMF announcing implementation of its long-pending quota reform, giving more voting rights to emerging economies.

With these changes, to be effected in the coming days, India’s quota in the IMF would rise to 2.7 per cent from the existing 2.44 per cent. Also, the voting share of India would increase to 2.6 per cent from 2.34 per cent. For the first time, four emerging market (EM) countries of the Brics bloc — Brazil, China, India and Russia — will be among the 10 largest members of IMF.

Two new multilateral agencies are also being set up — a New Development Bank of the Brics countries and an Asian Infrastructure Investment Bank.

An Asian economic crisis did occur in the late 1990s but from the Southeast Asian ‘tigers’ of that time. This time, one could emanate from China or another large economy from the EMs. According to the Economic Survey of 2015-16, if this kind of crisis does emerge, it would be very different from those of earlier decades. Since the 1980s, it said external financial crises have followed one of three basic forms — Latin American, Asian or global models.

In a Latin American debt crisis, governments went on a spending binge, financed by foreign borrowing (of recycled petrodollars) while pegging their exchange rates. In the Asian one of the late 1990s, the transmission mechanism was similar — overheating and unsustainable external positions under fixed exchange rates — but the instigating impulse was private borrowing rather than governnment borrowing.

The global one of 2008, with America as its epicentre, was unique in that it involved a systemically important country and originated in doubts about its financial system.

If a crisis occurs in China or another large EM, it is more likely to resemble events of the 1930s, when the UK and then the US went off the gold standard, triggering a series of devaluations by other countries and leading to a collapse of global economic activity.

If such a crisis hits India, it will require fresh prescriptions and it is here that the IMF centre would be of help, a source said.