Earlier this month, the World Economic Forum announced its 2003 Global Competitiveness Ranking. For Jamaica, the news was a mixed performance. On the one hand, the country showed some improvement in the lesser Business Competitiveness Index (BCI), moving to the 56th position, up from 59th in the 2002 Report, while on the other, more important Growth Competitiveness Index (GCI), there was a marked drop from the 57th position held in 2002 to 67th this year.

The overall 2003 winner was Finland which ranked number one in both indices, with the United States, Sweden and Denmark in the second, third and fourth positions respectively. Haiti occupied the bottom of the table in both indices for both 2002 and 2003. The specific position rankings aside, Jamaica did show some improvements in both indices in terms of its percentile performance. In the case of the growth competitiveness index, the country ranked in the top 65th percentile in 2003 up from the top 72nd percentile in 2002. On the secondary business competitiveness index, the percentile performance was 55th in 2003 compared to the 74th percentile in 2002 Report. Lest one is tempted to overstate the importance of this improved percentile, however, the improvement resulted from the fact that many of the countries in the survey, especially the new entrants, did poorly in the rankings. For the 2002 Report, there were 80 countries in the survey, while for 2003 the number of participating countries was 102.

The Growth Competitiveness Index ranking (GCI) was developed by Jeffrey Sachs of Columbia University and John W. Arthur of the Earth Institute while the complementary but separate Business Competitive-ness Index (BCI) was developed by Michael Porter of Harvard University. (See Table 1)

The results for the Latin America and Caribbean region as a whole were also mixed. Chile continues to be the top performer with the highest regional scores on all the indices while Haiti ranks at the bottom. That country's repeat participation given its challenges is certainly creditable. Brazil, Argentina and Uruguay all showed declining performances, consistent with the performances of Jamaica, the Dominican Republic and Trinidad & Tobago. On the upside, Ecuador and Bolivia recorded improved outcomes.

But just how useful or relevant is this rating to our survival and ability to grow? In a sense, competitive countries can be expected to achieve a sustained growth path over the medium to long term. Indeed, the Global Competitiveness Report helps to determine those countries with the best growth prospects.

For us in the Caribbean facing as we are, a hyper-turbulent and complex economic environment occasioned in part by trade liberalisation and new regional agreements, the manner in which we weather this turbulence depends on the robustness of our economies as well as the ability of our institutions and policies to drive growth in productivity and output. The Growth Competitiveness Index represents the best estimate of underlying prospects for a country's growth. True, it could be considered a crude measure - a rough overall ranking, but its aim is "to measure the capacity of the national economy to achieve sustained economic growth over the medium term, controlling for the current level of economic development."

There are three major sub-components to the GCI. These relate to technological innovativeness, the quality of public institutions (e.g., levels of corruption and law enforcement) and the nature of the macroeconomic environment and stability (e.g., country credit rating and fiscal policy). Table 2 gives Jamaica's rankings in these sub-components.

Of significance is that fact that Jamaica suffered one of the largest declines in the main GCI competitiveness index. The has been attributed to the country's deteriorating macroeconomic and public institutions indices, and particularly levels of rising corruption and the growth in organised crime. Among all nations, Jamaica showed the 2nd largest decline arising from corruption. Our drop from 57th to the 67th position in 2002 and 2003 reflects a continued negative turn as our ranking has also fallen compared to our 2001 performance when we occupied the 52nd position. Interestingly, Trinidad & Tobago remains the most highly ranked Caribbean island, coming in at the 49th position, which incidentally is also reflecting a declining performance.

See Table 3 for the comparative data for a few regional countries One important addition in the case of the 2003 survey was the addition of data from an executive opinion survey. Hard data such as inflation, the country's credit rating, the real exchange rate relative to the US dollar, the fiscal deficit, the national saving rate and the difference between the lending and borrowing rate were blended with the views of executives on such issues as government subsidies to keep uncompetitive industries, public trust in the financial honesty of politicians and the extent of diversion of public funds to companies, individuals or groups due to corruption?

The corruption index this year also drew heavily on the responses in the executive opinion survey conducted as past of the research. Here, executive opinions to issues such as the level of organised crime, use of bribes whether in connection with export and import permits or with annual tax payments, etc. and level of transparency in bidding for public contracts were obtained. Clearly, the answers provided by JamaicaÕs business community to these and other similar questions would help determine our score on the public institutions component of the index.

WHAT OF THE BUSINESS COMPETITIVE INDEX (BCI) RANKING?
The BCI more closely examines the underlying conditions defining the sustainable level of productivity and wealth creation, recognising these attributes are rooted in the operating practices of companies as well as the microeconomic business environment in which a nationÕs firms compete. A country's economy cannot be competitive if the companies operating in it are not, whether they are local firms or subsidiaries of overseas companies. In the 2002 Report this index was called the Microeconomic Competitiveness Results (MICI), and is fully comparable with this year's calculation. This index had two major composite sub-factors, namely the degree of corporate sophistication, and the measure of the quality of the national business environment, including such traits as venture capital availability, intellectual property rights protection, anti-trust policy, domestic buyer sophistication, level of business education and managerial practices. Jamaica's BCI and sub components rankings in Table 4.

Whether we like it or not, the Geneva-based World Economic Forum (WEF) Global Competitiveness Report published annually is widely regarded and the world's leading cross-country comparison of issues relating to economic competitiveness and growth. The Harvard Business School works closely with the WEF in the design of the questionnaires and indices. JamaicaÕs input is co-ordinated by the Mona School of Business (MSB) and the Private Sector Organisation of Jamaica (PSOJ) which are among the 104 partner institutions responsible for country data collection. About March next year, the MSB and PSOJ will again be contacting firms in the private sector for their participation in the survey with interviewers visiting corporate offices to provide clarifications if needed. We encourage all who are contacted to participate. Your insights and perceptions as reflected in the Executive Opinion Survey could play a big part in our country's 2004 ranking.

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