AFRICANGLOBE – Zimbabwe economy has maintained steady growth, slightly improving this year compared to last year’s ranking, the World Economic Forum has revealed.
WEF is a Geneva-based non-profit organisation best known for its annual meeting in Davos, Switzerland, where it engages political, business, academic and other leaders of society in collaborative efforts to shape global, regional and industry agendas.
According to the WEF’s 2014-2015 report entitled “The Global Competitiveness Report” released on Tuesday, the country’s ranking moved up by three points compared to last year.
The report, which coincides with the first anniversary of the Government that was sworn in on September 11 last year, revealed that out of 148 countries surveyed between 2013 and 2014, Zimbabwe ranked 131.
However, the country moved three points up as it ranked 124 out of 144 countries surveyed this year.
The Global Competitiveness Report is spearheaded by Professor Xavier Sala-i-Martín based at Columbia University (USA).
In Zimbabwe, the WEF worked with the University of Zimbabwe’s Graduate School of Management when compiling its latest report.
The forum defines competitiveness as the set of institutions, policies and factors that determine the level of productivity of a country. Although the WEF argued that Zimbabwe retained generally steady growth, it said there was need to strengthen the country’s key economic enablers such as parastatals that were riddled with corruption.
“Zimbabwe ranks 124th this year. Public institutions continue to receive a weak assessment, particularly related to corruption, alleged government favouritism, and the protection of property rights (ranked 138th), reducing the incentive for businesses to invest.
“Despite efforts to improve its macroeconomic environment—including the dollarisation of its economy in early 2009, which brought down inflation and interest rates—Zimbabwe still receives a low rank in this pillar (87th), which is characterised by high government debt, a negative savings rate, and low inflation.
Weaknesses in other areas include health (129th in the health sub-pillar); low education enrollment rates, with only every second child participating in secondary education; and formal markets that continue to function with difficulty, particularly goods and labour markets, which rank 133rd and 137th, respectively,” reads the report in part.
However, the report did not highlight the effects of the devastating illegal sanctions imposed by the West that are estimated to have cost Zimbabwe over $42billion in revenue over the past 14 years, and which have also seen the country failing to freely sell its God given natural resources such as diamonds as money continues to be intercepted by the US State Department’s Office for Foreign Assets Control.
In ranking the countries, the WEF looked at key pillars of the economies, some of which Zimbabwe is already addressing through the economic blue print, Zim-Asset, that is going to drive the economy until next elections in 2018.
The First pillar is the institutional environment determined by the legal and administrative framework within which individuals, firms, and governments interact to generate wealth.
“The importance of a sound and fair institutional environment has become all the more apparent during the recent economic and financial crisis and is especially crucial for further solidifying the fragile recovery, given the increasing role played by the state at the international level and for the economies of many countries.”
The second pillar is efficient infrastructure, which also Zim-Asset seeks to address.
Thirdly, the WEF said the stability of the macro-economic environment was important for business and, therefore, was significant for the overall competitiveness of a country.
Other pillars are; 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.
The WEF urged policymakers, business and civil society leaders to work together in order to ensure robust economic growth.
“Economic and social agendas must go hand in hand and focus on reforms that will render economies more productive and open up new and better job opportunities for all segments of the population.
“In this context, policymakers, businesses, and citizens increasingly recognise the need for economic growth to be balanced by providing opportunities and benefits for all segments of the population and by being respectful of the environment,” reads the report.
The report contains detailed profile for each of the economies included in the study, as well as an extensive section of data tables with global rankings covering over 100 indicators.
“Emerging economies are forecasted to grow more modestly than they did in the past. After several years of doing very well and leading global growth, their performance may be affected by a changing environment characterised by greater difficulty accessing capital as well as lower prices for the commodities that fueled past growth—a trend that is also likely to affect many developing economies Since 2005, the World Economic Forum has based its competitiveness analysis on the Global Competitiveness Index (GCI), a comprehensive tool that measures the microeconomic and macroeconomic foundations of national competitiveness.”