Israel’s Standing in Economic Competitiveness Improves
(June 1, 2006)
By David Krusch
According to the 2006 World Competitiveness Yearbook published by the IMD business school, one of the most respected schools of its kind in the world, Israel has moved from #42 to #20 out of a pool of 61 countries in economic competitiveness in the past year. The 61 countries are ranked by the school, based on the factors of economic performance, government efficiency, business efficiency, and infrastucture. The United States, Hong Kong, Singapore, Iceland, and Canada are the world's leaders in economic openness, while nations such as Venezuela, Romania, Croatia, Indonesia, Argentina, and Poland rank at the bottom. In the general rankings, which include government, bureaucracy, infrastructure and business sector activity, Israel is ranked 25th.
Israel is ranked Number 18 in the category of countries with fewer than 20 million inhabitants. Israel is ranked #1 in the world for research and development as a percentage of its Gross National Product and #2 for entrepreneurship and education. Israel is also ranked first in public spending on education as a percentage of GDP, up from third place in 2005. Israel is also ranked third in IT, up from fifth place in 2005; fourth in skilled manpower, up from tenth place; sixth in openness to the global market, up from 13th place; and seventh in Noble Prize laureates relative to total population, up from ninth place. There were some negatives however, with Israel receiving the ranking of 56th out of 60 for work force participation and 55th for tax rates for corporations. In the field of labor sanctions and strikes, Israel ranked Number 54. The country also lost its first place ranking for number of cell phones per person.
Although the government recognizes there is still much to be done to fix the nation's turbulent economy, many believe that this rise in economic freedom is a large step forward.
Source: IMD, Moti Bassok, “Israel moves up in economic freedom,” Ha'aretz, (July 8, 2005), Hadad Manor, “Israel up 22 places in world competitiveness rankings,” Globes (May 31, 2006).