Bulgaria’s position in the ranking of the World Economic Forum Global Competitiveness Index is moving upwards for the sixth consecutive year. In the Global Index 2017/2018 Bulgaria is 49th out of 137 countries included in the ranking. Bulgaria started from 74th place in 2011 and last year occupied 50th place. The climb up to 49th place takes us ahead of Latvia (54), Slovakia (59), Hungary (60), Cyprus (64), Romania (68), Croatia (74), Greece (87) and Serbia (78). The Czech Republic and Poland lead the ranking for the CEE region, taking 31st and 39th place respectively, while this year Macedonia is not included in the Index because of insufficient data.
The slight upward climb is mainly due to the improvement of the macroeconomic environment, including the indicator for improving investor protection. Bulgaria’s rating here is above the average for the EU and North America. A slight decline was reported in indicators such as institutions, infrastructure, primary education and health care. The weakest areas of our economy are corruption and inefficiency of the state administration.
The WEF ranking is based on 114 indicators, divided into 12 groups, including institutions, infrastructure, macroeconomic environment, health and primary education, labor market efficiency, technological readiness, innovation, etc. All of them determine each country’s average performance rating and potential for prosperity. The value of each indicator is formed under a scale from 1 (poorest) to 7 (strongest performance) and together they give the overall average rating of the country. Bulgaria’s overall rating this year is 4.46 (compared to 4.44 last year). The leader in the ranking is Switzerland with a total score of 5.86, while the lowest placed country in the list is Yemen with 2.87.
Doing business in Bulgaria
Bulgaria reports best results on the budget balance indicator taking 6th place in the Index. Other indicators that we rank high with are government debt, investor protection, and technological indicators, such as access to broadband Internet services.
It is no surprise that we get lowest scores for independence of the judiciary system, fight against organized crime, transparency of policies, protection of physical and intellectual property, efficiency of taxation, ability of the labor market to attract and retain talents.
Top-performing countries – almost unchanged
For another consecutive year, Switzerland remains the leader; the second place is taken by the United States, which switched places with Singapore. No new names appear by the end of the top ten, only a slight change of positions. Thus the Netherlands comes fourth, followed by Germany, Hong Kong, Sweden, Great Britain, Japan and Finland.
Key Findings of the Report
The World Economic Forum points out that economies massively report a decline in productivity. The trend is visible even in countries with developed economies despite the significant global technological progress. The organization draws attention to clear signs of polarization in the labor market, leading to a decline in the skills of skilled labor force at the medium level and, at the same time, a drastic increase in both unskilled and highly skilled workers. The reason for this is the high unemployment rate and the still low level of investment. In recent years, investments have been below historical levels – in Europe, for example, for the period 2008-2015, the average annual decline in investments is of EUR 260 billion.
With regard to innovation, the World Economic Forum notes that the speed and destructiveness of technological change will continue to create unprecedented opportunities and challenges that will become even greater through the increasing interplay between digital, physical and bio technologies – that is what characterizes the Fourth Industrial Revolution.
Emerging technologies will have tremendous potential to be a source of growth but also a challenge as to how their potential is to be exploited in a way that will not lead to a sharp and drastic change in national and global income distribution and an even greater polarization and uncontrollable structural changes. Loss of jobs due to technologies that are already transforming production and services is expected to draw particular attention to the question of how to create new human skills and new jobs and what future models of economic development should be.
The full edition of the Index can be downloaded from the World Economic Forum website here. The main articles and conclusions accompanying the Competitiveness Index 2017/2018 can be found at the same address.