The Global Competitiveness Report Economics Essay

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World Economic Forum, a Geneva based independent organisation, annually publishes the Global Competitiveness Report which provides rankings of the economic fight of a state. This is based on 12 pillars of fight at all phases of development. The Global Competitive Index ( GCI ) helps in ranking states based on their fight. A extremely graded state will find a high degree of productiveness ( “ World Economic Forum ” , n.d. ) .

Tajikistan has late faced strong economic growing and stableness. However, it has besides faced hard planetary fiscal, energy and nutrient crises. Tajikistan has been ranked 116 out of 139 and has scored 3.5 GCI on a graduated table of 1-7. This has improved from old twelvemonth rank of 122. This shows a growing in state ‘s productiveness. Tajikistan is still in 1st phase of development i.e. , Factor Driven Stage because it has GDP per capita less than 2000 USD ( Appendix A ) .

Beginning: Global Competitiveness Report, 2011

12 Pillars of Competitiveness

Adapted from: Global Competitiveness Report, 2011

12 Pillars of Competitiveness is divided amongst Sub Indexes. When Sub indexes are analysed, Tajikistan lies on 112th place for Basic demands, 123rd in efficiency foils and 118th place ( Appendix B ) in invention and edification factor ( GCR, 2011 ) .

1st Pillar: Institutions

Tajikistan is ranked 77 with a GCI mark of 3.8 ( GCR, 2011 ) . Tajikistan has more thriftlessness of authorities disbursement, load of authorities ordinance and more concern cost of offense force. However, it has hapless efficaciousness of corporate boards and transparence of authorities policy devising ( Appendix C ) .

2nd Pillar: Infrastructure

Tajikistan is ranked 116 out of 139 and has scored merely 2.6 GCI out of 7 ( GCR, 2011 ) . There are about 30,000 kilometer of roads of which tierce is in hapless status ( Jane ‘s Intelligence, 2011 ) . Quality of Airport Infrastructure is one of the worst out of 139 states of GCR ( Appendix C ) .

3rd Pillar: Macroeconomic Environment

Tajikistan is ill ranked 131 out of 139 and tonss 3.3 GCI ( GCR, 2011 ) .

4th Pillar: Health and Primary Education

Tajikistan is ranked 97 in Health and Primary Education and has scored 5.3 GCI. There are 50 nurses and accoucheuses per 10,000 people, 20 doctors per 10,000 people, 61 infirmary beds per 10,000 people ( Kaiser Family Foundation, n.d. ) . There is high Primary Education Enrolment rate of 95 % for misss and 99 % for male childs ( UNESCO Education Database, n.d. ) .

Beginning: UNESCO Education Database

fifth Pillar: Higher Education and Training

Ranked as 105 with a GCI of 3.4, Tajikistan has literacy rate is 99.6 % for those 15 old ages and older. The secondary instruction registration rate is 77 % of misss and 88 % of male childs ( UNESCO Education Database, n.d. ) .

6th Pillar: Goods Market Efficiency

Tajikistan is ranked 128th in GCR 2010-2011. This state has many trade barriers and Numberss of processs required for get downing a concern ( Appendix C ) .

7th Pillar: Labour Market Efficiency

Tajikistan has relatively good labor market efficiency and is ranked 73 and has GCI mark of 4.4 ( GCR, 2011 ) . Tajikistan ‘s wage and productiveness is rather high and flexibleness of pay finding is better. However, trust on professional direction is unequal ( Appendix C ) .

8th Pillar: Fiscal Market Development

Availability and affordability of fiscal services is hapless, but handiness of venture capitalist is second-rate ( Appendix C ) . This state is ranked 127 for Fiscal Market Development ( GCR, 2011 ) .

9th Pillar: Technological Readiness

Internet usage in Tajikistan is 8.8 per 100 people and 1.3 personal computing machines per 100 people ( World Bank, 2009 ) . It is graded 120 in GCR 2011.

Beginning: World Bank – ICT at a Glance – Tadzhikistan

tenth Pillar: Market Size

Tajikistan is ranked 126 in market size and has a GCI of 2.3, as there is really low foreign market size ( Appendix C ) .

11th Pillar: Business Edification

This state has low quality and measure of local providers with improper control of international distribution ( Appendix C ) . Therefore, Tajikistan is ranked at 126th place in Business Sophistication.

12th Pillar: Invention

Tajikistan is on 103rd place ( GCR, 2011 ) . Government efficaciously procures promotion of engineering merchandises and has fair capacity of invention, but there is unequal disbursement and coaction in R & A ; D ( Appendix C ) .

Beginning: Global Competitiveness Report, 2011

( B ) Tajikistan: Theory OF COUNTRY SIZE

Location and Climate

Tajikistan is surrounded by landed country by Uzbekistan, Afghanistan, China and Kyrgyzstan and has no coastal country. Dushanbe is the capital metropolis and state ‘s largest commercial Centre. The state has 93 % mountains and half of its district lies above 3,000 meters. The highest extremum is Peak Somoni ( approx. 7,500 meters ) . It has Continental climatic conditions. There are utmost cold winters and hot summers. However, southern part has semitropical clime, where rainfall occurs in winter and spring. Tajikistan has plentifulness of H2O resources with the chief rivers being the Syr Darya and the Amu Darya ( UK Foreign and commonwealth Office, 2010 ) .

Population

Most of the population resides in the cultivable countries – the Ferghana, Gissar and Vakhsh Valleys Darya ( UK Foreign and commonwealth Office, 2010 ) . Tajikistan ‘s population is about 7 million with population denseness of 49 people per square kilometer ( UN World Population Prospects, 2008 ) . The rough birth rate is 27.4 per 1,000 people, the decease rate is 6.2 per 1,000 people, and the birthrate rate is 3.13 kids per female ( Appendix D ) . The population growing rate is 1.85 % ( UN World Population Prospects, 2008 ) .

Beginning: www.Indexmundi.com

Resources

The state is flush in many sedimentations of natural resources such as coal, quicksilver, oil, gas, Sn, Sb, Mo, gold, Ag, salt, talc, asbestos, F, limestone, marble, gypsum, clay, sand-pebble stuffs, cherished rocks, etc. There are about 400 sedimentations explored and 70 of which are being exploited ( State of Environment Report, 2003 ) .

Beginning: Geoscience Database of ECO, 2011

2.9 % of the state is covered by woods and arable land is merely 6.52 % of the country of the state ( World Development Report, 2009 ) . Cotton is the most important harvest. Industries are chiefly a big aluminum works, hydropower installations, and little antique mills largely in light industry and nutrient processing ( Forbes, 2007 ) .

Tajikistan ‘s Natural Advantage: its H2O resources.

Tajikistan is in first place in footings of hydrological resources topographic point in Central Asia and ranks 3rd in the universe after U.S. and Russia. These resources are chiefly used for irrigation and industrial demands. Cragged rivers are used potentially to develop hydroelectric power which produces 95 % of the entire electricity ( State of Environment Report, 2003 ) . Energy ingestion per capita is less. In 2007, around 4500 million kWh of electricity was exported from Tajikistan. During drouth in 2000, when H2O degree dropped in reservoir functioning the largest hydroelectric power station in all of Central Asia, Norak, so Tajikistan besides imported electricity amounted to an estimated 5242.3 million kWh ( Ministry of Foreign Affairs, 2007 ) .

The hydropower dike Rogun and Sangtuda I and II are under building. Rogun is planned to hold a capacity of 3,600 megawatts that will be able to bring forth an mean one-year end product of 13.3 billion kWh. Tajikistan Government is uneasily placing any foreign finance to complete the building of the Rogun ( Ministry of Foreign Affairs, 2007 ) . When finished, they would add significantly to electricity production and so it can be exported for net income. Furthermore, Rogun will be the universe ‘s tallest dike ( Forbes, 2007 ) .

Hydroelectric energy will boon Tajikistan ‘s economic growing in close hereafter because there is high demand to import oil and natural gas from its neighbouring states ( Ministry of Foreign Affairs, 2007 ) .

( degree Celsius ) Political Environment of Tajikistan

The Republic of Tajikistan got its independency during the dissolution of the U.S.S.R. in 1991 and shortly faces a civil war from 1992 to 1997. Its recent election in 2006 was considered blemished and unfair but peaceable because resistance founded resolved their differences peacefully and decided to work together. In this election, President Rahmon protected his new 7 twelvemonth term in office. There is deficiency of transparence in the legislative procedure which resulted in the failing of civilians in Tajikistan ( Global Edge, n.d. ) .

Security Concerns and Foreign Relations

Among immediate vicinity, Afghanistan and Uzbekistan have hard relationship with Tajikistan and is the chief security concern. Uzbekistan has concerns about Tajikistan ‘s programs to develop hydropower, which it considers as a menace to downstream irrigation. The uncontrolled illegal trafficking of opium and diacetylmorphine from Afghanistan through Tajikistan, promoting corruptness, violent offense, and economic deformations are still serious menace to Tajikistan ‘s stability and development ( Global Edge, n.d. ) .

Civil Rights and Autonomies

Freedom House has given Tajikistan a position of “ non free ” and has allocated 6 out of 7 evaluation for political rights and 5 out of 7 for civil rights. The lower the evaluation the higher the grade of political and civil autonomies ( Freedom House, 2009 ) . Legal right is given to workers to organize and fall in trade brotherhoods and deal jointly. The authorities indulges in choice of brotherhood leaders and so controls the trade brotherhood motion. All trade brotherhoods must register with the authorities ( US Department of State, 2009 ) .

Economic Environment of Tajikistan

This state has one of the lowest per capita GDPs of $ 1,907.00 ( Global Edge, n.d. ) . From 1992 to 1997, the civil war strictly damaged the delicate economic substructure which resulted in fast decline of industrial and agricultural production. Since so Tajikistan experienced stable economic growing, but about two-thirds of the population still live in poorness ( Forbes, 2007 ) . Due to Tajikistan ‘s weak administration, broad unemployment and external debt load, its economic state of affairs is weak but is following steps to retrieve from it ( Appendix D ) . However, the continuance of privatizing of medium and big endeavors can increase the state ‘s productiveness ( Forbes, 2007 ) .

Government ‘s Attitude towards Trade

Socio-Economic Aims

Tajikistan is an agricultural state and about 50 % of labor is employed in this sector ( Appendix D ) . Government distributed 75 1000s hectares of land secret plans among rural population and 10,800 farm endeavors were in operation which resulted in increase of grain production up to 600,000 metric dozenss per twelvemonth. Tajikistan besides has immense capableness to bring forth hydro-electricity power ( UNESCAP, n.d. ) . Tajikistan is confronting more export competition because under World Trade Organization, the international concern environment is rule-based and of higher degree. Tajikistan is looking for understanding of WTO because merely duties and discriminatory trade grants do non vouch export fight. Tajikistan ‘s strong agricultural sector of high quality cotton and procedure nutrient merchandises offers export chances ( USAID, 2006 ) .

Political Aims

Tajikistan signed understandings on publicity and common protection of investings with many states. Presently, more than 210 joint ventures are established in Tajikistan. The chief countries of activities of joint ventures are fabrics, end product of necessary merchandises, export-import operations, agro-processing, building and building stuffs, telecommunications, and mineral resources geographic expedition Among the chief trading spouses of Tajikistan are Belgium, Germany, Italy, Liechtenstein, Netherlands, Switzerland and the United Kingdom. The chief exports to these states are natural cotton and aluminum ( UNESCAP, n.d. ) .

Beginning: UNESCAP

( vitamin D ) GLOBALIZATION IN TAJIKISTAN

Globalization helps a state like Tajikistan to come in foreign markets and entree the latest engineerings and concern methods by engagement in planetary production webs, to better scope and quality of their merchandises. However, the increasing force per unit area of competition forces local manufacturers to work more expeditiously and adapt rapidly to the altering concern environment. Although accession to WTO seems to be an inevitable measure, Tajikistan need to do certain that it will increase their economic growing and societal development, better life criterions for their people and increase trade ( UNESCAP, n.d. ) .

Fiscal System

Inflation in Tajikistan is non yet to the full under control and high degree of external debt and exchange rate failing shows that stabilisation may non be maintainable. The slow economic growing in Tajikistan is related to undeveloped market establishments and besides to the deficiency of competitory environment in the state. Tajikistan ‘s fiscal system still remains in the initial developmental stage. It experiences many obstructions in developing foreign trade. Among those are its landlocked state of affairs and geographical farness, developing conveyance substructure, national security jobs and the low buying power of its population ( UNESCAP, n.d. ) .

Import and Export

Many merchandises are imported, even though most of them could be produced locally because those endeavors have deficient fiscal resources either to run at all or to run at a high degree of capacity use. Tajikistan does non hold the resources to develop export oriented industries as it requires big, hazardous investings to bring forth goods that are competitory in universe markets. Tajikistan should look towards spread outing the production and export of goods in which it has a comparative advantage, such as cotton fibril, cotton and silk narrations and aluminum ( UNESCAP, n.d. ) .

Recommendation

An effectual trade facilitation system is a important chance in keeping a trade capacity ( particularly for landlocked Tajikistan ) ( UNESCAP, n.d. ) .

An effectual trading capacity can profit in following ways:

Cheaper imports

Lower rising prices and so lower rewards and low production cost.

Quick and dependable motion and cargo of exports.

Tajikistan besides needs to

Set up lasting mission at WTO, Geneva and seek acknowledgment as Least Developed Country by the UN.

It should increase opening hours of cardinal boundary line traversing station to 24 hours per twenty-four hours, as they open merely for 10 hours per twenty-four hours.

It should concentrate on upgrading substructure and operations of the boundary line traversing points and present “ single-window ” boundary line traversing attack.

Tajikistan should better ownership and administration of cotton farms and present Universal Cotton Grade Standards.

It should besides follow programs to increase electricity monetary values and develop regional electricity market with Nurek extra capacity.

It should besides better Privatization procedure to more FDI friendly ( World Bank, 2005 ) .

However, Tajikistan besides has to be competitory as providers and elevate quality of export merchandises for international competition. New merchandises have to be developed and new markets to be explored. Furthermore, Tajikistan needs to progress and bring forth substructure to keep the state ‘s fight.