SA falls by 10 places on competitiveness index

SOUTH Africa has fallen 10 places in two years on the World Bank's global competitiveness index and is ranked last among 134 countries on the business cost of crime and violence.

The 2008-09 report released at the World Economic Forum in Cape Town yesterday placed South Africa 45th out of 134 countries ranked in the annual survey. It was in 44th place last year and ranked 35th in 2006-07.

The index is based on both statistics and perception surveys. Each country is measured on 12 categories and dozens of individual issues.

SA is in the top third on most issues related to governance and financial management, but is hobbled by health, education and security matters.

It's in the top 10 for auditing standards, corporate governance, equity financing, investor protection and securities regulation. But it's in the bottom 10 for crime, labour regulations and the costs to business of HIV and TB.

In a survey of the problems cited by business, the skills level of workers was identified as the biggest obstacle by 22,3 percent of respondents and crime by 19,8 percent as the biggest issue. No one cited tax levels as a problem.

Editors said the cost of finance and the risk of protectionism were Africa's main short-term challenges.

They said the longer term requirements were improved infrastructure, education and health care and strong examples of good governance across the continent.

"The most critical issue for us now is how we strike a balance between a short-term crisis response while staying focused on long-term issues that are key for sustaining Africa's growth," said Donald Kaberuka, president of the African Development Bank.