Republic improves rating for competition

Ireland has jumped four places in in the latest rankings of competitive economies compiled by the World Economic Forum.

The State has climbed to 26th place in this year's table from 30th position in 2004.

Ireland's position was undermined by a relatively poor result in the technology component of the survey, where it placed 31st.

It scored particularly well on national macroeconomic conditions and the quality of public institutions where its performance catapulted it towards the top 13 of the 117 economies included in the annual Global Competitiveness Index.

Ireland's performance was one of the most notable among European states.

Finland, followed by the US and Sweden, remains the most competitive economy in the world, according to the latest rankings from the forum that feature all five Nordic countries - including Denmark, Iceland and Norway - in the top 10.

The forum says the Nordics' "stellar performance" - due to sound economic management and well-functioning public institutions - challenges "the conventional wisdom that high taxes and large safety nets undermine competitiveness, suggesting that what is important is how well government revenues are spent, rather than the tax burden per se". Finland ranked number one for the fourth time in five years.

The Geneva-based World Economic Forum, best known for organising the Davos business forum, has ranked economies on a range of criteria intended to capture the determinants of productivity and growth. These criteria, drawn from statistical sources and a survey of nearly 11,000 business leaders, include economic indicators, technological competence and innovation, and the quality of public institutions. Thus the US, despite "overall technological supremacy", is let down by poor economic management and the perceived negative influence of lobbies on government policy.

None of the other members of the Group of Eight large industrialised nations is in the top 10. Japan is in 12th place, followed by Britain, Canada and Germany.

France, though the third most popular destination for foreign investment, trails at 30. Italy, at 47, is the worst performing European Union state apart from Poland, which has nevertheless jumped nine places to 51. Greece moved the other way, dropping nine spots to rank 46th. Russia, meanwhile, has slipped to 75.

China and India, which have notched up impressive economic growth in recent years, are ranked at 49 and 50 respectively, reflecting a fall of three places for China and a gain of five places for India since last year. But, warns Augusto Lopez-Claros, the forum's chief economist, both suffer from institutional weaknesses that could slow their "ascension to the top tier" of the world's competitive economies.

Latin America Chile (23) leads the pack with Venezuela sliding further to 89. - (Financial Times Service)