Vietnam becomes less competitive on global index

The country was ranked 74th in last year’s global competitiveness index, but fell three places to 77th this year, according to a WEF report released Wednesday.

The 2018 Global Competitiveness Index 4.0 report said that Vietnam’s overall competitiveness score of 58.1 was lower than the world average of 60.

The report defines competitiveness as the set of institutions, policies and factors that determine the level of productivity.

It added that Vietnam scored highest in the factors of health (81 points, ranked 68th), macro-economic stability (75 points, 64th) and market size (71 points, 29th).

The report ranked Vietnam 102nd among 140 countries in terms of product market and 101st in business dynamism.

The product market index components include the extent of market dominance, competition in services and trade tariffs.

Vietnam’s innovation capability was the weakest among twelve factors used in determining the competitiveness index, at just 33 points, ranked 82nd.

The country’s adoption of information and communication technology (ICT) had the second-lowest score of 43 points, ranked 43.

The report added that globalization has contributed to reducing global poverty and inequality between countries. It cited Vietnam as an example, saying the U.S.-Vietnam bilateral trade has helped reduce poverty by increasing wage premiums in export sectors.

The trade pact also reallocated Vietnamese labor from agriculture to manufacturing, stimulating enterprise job growth, it said.

The report also cited Vietnam as an example of one of the fastest growing economies in the East Asia and Pacific (EAP), which is the fastest-growing region in the world, accounting for one-third of global growth last year.

Vietnam, along with Cambodia, China, Laos and the Philippines, had a growth of over 6 percent last year, it added.

The EAP also contributed three countries/territories to the world’s most competitive economies: Singapore (scored 83.5, ranked 2nd), Japan (82.5, 5th) and Hong Kong (82.3, 7th).

The U.S. topped the ranking with a score of 85.6 thanks to vibrant entrepreneurial culture and high scores in the labor market and the financial system.