NationalVolume 14 Issue # 07

World competitive index and Pakistan

According to the Global Competitiveness Index 2018 released by the World Economic Forum recently Pakistan slipped by one position as compared to last year, ranking 107 out of 140 countries, with a score of 4.0.

With an overall ranking of 107 out of 140 countries, Pakistan was at 109 for institutions; 93 for infrastructure; 127 for ICT adoption; 103 for macroeconomic stability; 109 for health; 125 for skills; 122 for product market; 121 for labour market; 89 for financial system; 31 for market size; 56 for business dynamism; and 75 for innovation capacity. In 2017, Pakistan ranked 106 out of 135 countries.

In the area of the freedom of press, the country’s score was worse with a ranking of 112. The judicial independence which is considered 1–7 as the best, Pakistan ranked 70, while in budget transparency the score was 77. In respect of terrorism incidence, Pakistan was further close towards the bottom. In the area of train efficiency, where the best index is 1-7, Pakistan was placed at 52, whereas in airport connectivity, the country was placed at 41.

The United States tops the 2018 rankings, confirming its status of most competitive economy in the world, according to the WEF. Overall, the United States scored an average of 85.6 points when the nearly 100 indicators were measured on a scale of 0 to 100.That is still a far cry from what WEF considers the optimal conditions for a competitive economy, but well above the global average of 60 points. WEF hailed the US for its business dynamism and vibrant entrepreneurial culture, its flexible labour markets, the depth, breadth and relative stability of its financial system and its market size. In terms of innovation capability, India stood as the second best country while Pakistan followed far behind at the 7th rank.

We are living in a global economy and the competition among nations is stiff and growing.  The rule is: if you are not competitive, you cannot survive in this cut-throat world.  Every year the World Economic Forum publishes a Global Competitiveness Report which compares the competitive strength of various countries on the basis of a set of criteria encompassing all aspects of the economy.


Since its inception in 2004, the Global Competitiveness Index has been a widely recognised measure of the factors that determine the economic prosperity of a nation. The index amalgamates the macroeconomic situation as well as competitiveness of the micro business enterprises into a set of indicators by which a nation’s economic condition is measured. The Global Competitiveness Index (GCI) is based on 12 pillars that provide a comprehensive picture of the competitiveness landscape in countries around the world at different stages of economic development. The report contains detailed profiles highlighting competitive strengths and weaknesses for each of the 140 economies covered.


The WEF’s Global Competitiveness Index shows a close link between competitiveness and an economy’s ability to nurture, attract and support talent. The top-ranking countries all fare well in this regard. But in many countries, too few people have access to high-quality education and training, and labour markets are not flexible and accommodating enough.


Over the years, Pakistan has fallen in the GCI scores. The WEF report shows that while the indicators for the quality of education system have improved, availability of internet access in schools has deteriorated. This is a result of the multiple education systems prevailing in the country under which only a few elitist schools provide quality education. The factor of greater favouritism in decision-making by government officials shows Pakistan falling 26 ranks in 2018.

The report identifies corruption as the most significant hurdle to doing business in Pakistan: 16 percent of the respondents believed so, while 12.7 percent pinpointed tax rates as the biggest problem. Last year’s Global Competitiveness Report also ranked corruption as the second biggest deterrent following inadequacy of infrastructure. In this year’s study, only 5.6 percent of the respondents blamed infrastructure as the most problematic factor for doing business, compared to 14.3 percent last year.


Sixty percent of Pakistan’s GCI score is made up of basic requirements (institutions, infrastructure, macroeconomic environment and health and primary education). Since the 2013 elections, the sub-index score has not changed. Although the macroeconomic outlook has improved, institutional weaknesses remain and have been intensifying. Lack of government policymaking and patronage and cronyism vitiate the working of public institutions. Low scores in some of the most basic areas reflect the government’s failure in its attempt at institutional reforms. Significantly, the score for health and primary education has worsened considerably.


The weakest sector of Pakistan’s economy identified in the report is its regulatory mechanism. Various regulatory bodies have shown weak governance indicators, losing ranks to other emerging markets. The GCI ranking shows that the performance of the Competition Commission of Pakistan has deteriorated.  The effectiveness of its anti-monopoly policy has gone from bad to worse.

Other factors adversely affecting Pakistan’s competitiveness cited in the report are inflation, lack of access to financing, inefficient government bureaucracy and policy instability, an inadequately educated workforce, crime and theft, poor work ethic, restrictive labour regulations, insufficient capacity to innovate and poor public health administration. Needless to add, Pakistan has a long way to go to improve its competitive capacity.