Global competitiveness index: Israel falls two places

The country fall to 19th place, after scoring 78.57 from a possible 100
 
IMD announced last week the findings of its 2012 World Competitiveness Index (WCI). The rankings measure how well countries manage their economic and human resources to increase their prosperity.
 
The most competitive of the 59 ranked economies in 2012 are Hong Kong, the US and Switzerland (see overall rankings table below).
 
Despite all its setbacks, the US remains at the center of world competitiveness because of its unique economic power, the dynamism of its enterprises and its capacity for innovation.
 
Israel dropped two places, from 17th to 19th. Israel’s score of 78.57 from a possible 100, put it directly behind the United Kingdom and directly ahead of Ireland.
 
The drop from 17th to 19th place was despite Israel's displaying improvement in inbound direct investment, real GDP growth per capita and the unemployment rate.
 
Israel improved strongly in the area of direct investment flows inward, which increased to $11.4 billion (or 4.69 percent of GDP), in 2011, from $5.15b. the previous year. It was also judged positively on real GDP growth per capita, which rose to 2.98% in 2011 from 2.27% the previous year, and its unemployment rate, which dropped from 6.6% to 5.6% in 2011.
 
Israel continued to lead by example in business efficiency and infrastructure, maintaining its number one ranking for business expenditure on R&D (3.52% of GDP), total expenditure on R&D (4.41% of GDP), and public and private sector ventures. It ranked second in entrepreneurship, innovative capacity, scientific research and several other sub-categories listed under infrastructure.
 
On the other hand, Israel was punished for its poor current account balance, which dropped to -0.1% of GDP in 2011 from 2.9% the previous year, and is expected to fall even further in 2012. It also lost points for its higher rate of consumer-price inflation and for direct investment flows abroad – which decreased to $3.32b. (or 1.37% of GDP) in 2011 from $7.96b. the previous year.
 
According to the index, The most competitive nations in Europe are Switzerland (3), Sweden (5) and Germany (9), which have export-oriented manufacturing and fiscal discipline.
 
Meanwhile, Ireland (20), Iceland (26) and Italy (40) look better equipped to bounce back than Spain (39), Portugal (41) and Greece (58), which continue to scare investors.
 
Emerging economies are not yet immune to turmoil elsewhere. China (23), India (35) and Brazil (46) have all slipped in the rankings, while Russia (48) climbed only one place. All Asian economies have declined, apart from Hong Kong (1), Malaysia (14) and Korea (22).
 
Qatar (10th) and the United Arab Emirates (16th) were the top two Middle Eastern countries.