Russia has jumped to a 53rd position on the Global Competitiveness Report in 2014, gaining 11 points and being named among three states which recorded higher values in all areas since 2010. This is the country’s biggest leap ever.
“The Russian Federation is placed at 53rd position this year with some improvements related to the efficiency of goods markets (in particular domestic competition), ICT use, and business sophistication,” says the Global Competitiveness Report 2014–15, which assesses the competitiveness landscape of 144 economies.
According to the Global Competitiveness Index, Russia is ranked better than 40th in four categories - market size (7th), macroeconomic environment (31st), higher education and training (39th), and infrastructure (39th).
Russia ranks 56th in health and primary education, and 59th in technological readiness. It sits 97th in terms of institutions and 45th in labor market efficiency.
The report notes Russia’s competitiveness strengths, “which are based on a well-educated population, fairly high levels of ICT use (47th), and its solid potential for innovation (65th).”
Russia also made it on to the list of 20-largest emerging economies on selected components of the report.
“Only three countries have recorded higher values in all areas since 2010: Malaysia, the Philippines, and the Russian Federation,” says the report.
The country’s innovation and sophistication factors reach 24.5 percent: 86th in business sophistication and 65th in innovation.
However the report said that the country is yet to face certain challenges.
“Russia’s weak and inefficient institutional framework (97th) remains its Achilles heel and will require a major overhaul in order to eradicate corruption and favoritism (92nd) and re-establish trust in the independence of the judiciary (109th).”
Diversification of the economy will require reinforcement of the very small SME sector as well as continued progress toward a stronger and more stable financial system (110th). It still ranks a low 119th in market competition and 102nd in public institutions.
The report says that that tensions “in Ukraine with implications for the relationship between Russia and much of the Western world, as well as between China and Japan, have become more evident.”
“Although the implications of these tensions have not yet fully materialized, they could cause a great deal of disruption in the highly interdependent, global macroeconomic outlook.”
As the research was made before the beginning of the civil unrest in eastern Ukraine and Western sanctions against Russia, it may have negative effects on Russia's rating in the long term, the report warns.
“Going forward, the reverberations of the Ukraine conflict—such as sanctions and potential disruptions to the gas trade—could affect the country’s competitiveness.”
Switzerland, Singapore and the United States are the leaders of the Global Competitiveness Index 2014–2015 Rankings.
Switzerland tops the rank for the sixth time and remains the country which “boasts the highest number of Patent Cooperation Treaty applications per capita in the world.”
“Switzerland’s notch academic institutions, high spending on R&D, and strong cooperation between the academic and business worlds contribute to making it a top innovator,” says the report.
The United States has improved its position from 5th to 3rd, says the document. The report says that the country has “improvements in a number of areas, including some aspects of the institutional framework, and more positive perceptions regarding business sophistication and innovation.”