Finland remains the most competitive economy in the world and tops the rankings for the third consecutive year in The Global Competitiveness Report 2005-2006, released Wednesday by the World Economic Forum (WEF).

The United States is in second position, followed by Sweden, Denmark, Taiwan of China and Singapore, respectively.

Altogether 117 countries and areas are included in the rankings. Researchers place particular attention on elements of the macroeconomic environment, the quality of public institutions which underpin the development process, and the level of technological readiness and innovation.

"The Nordic countries share a number of characteristics that make them extremely competitive, such as very healthy macroeconomic environments and public institutions that are highly transparent and efficient, with general agreement within society on the spending priorities to be met in the government budget," said Augusto Lopez-Claros, chief economist and director of the WEF's Global Competitiveness Program.

According to the report, the United States demonstrates overall technological supremacy, with a very powerful culture of innovation. However, technological prowess is partly offset by a weaker performance in other areas measured by the index. The country's greatest weakness concerns the health of its macroeconomic environment, where it ranks a low 47th overall.

Leading within Asia are Taiwan of China and Singapore, ranked 5th and 6th respectively. Japan fell from 9th in 2004 to 12th this year, reflecting Japan's relatively poor macroeconomic performance, particularly with regard to the management of public finances. Hong Kong of China ranked 28th, having dropped 7 places since last year.

China and India, 49th and 50th, respectively, now rank much more closely to one another than in previous years. While China dropped 3 ranks, India moved up 5 places. China's macroeconomic environment score deteriorated slightly, while India's improved position is due to a somewhat higher rank in the area of technology.

As in previous years, Chile, ranked 23rd, leads the way in Latin America by a wide margin. Chile continues to benefit from a combination of remarkably competent macroeconomic management and public institutions, which have achieved EU levels of transparency and efficiency, says the report.

Within the Middle East and North Africa region, the small Gulf states perform quite well in the overall rankings. The United Arab Emirates (UAE) and Qatar are ranked 18th and 19th, respectively.

While most of the countries of the sub-Saharan African region are less competitive, the region does have a number of relative success stories. This includes South Africa (42nd), Botswana ( 48th), Mauritius (52nd) and Ghana (59th).

The World Economic Forum has been producing The Global Competitiveness Report for 26 years.

"By highlighting the strengths and weaknesses of an economy, policy-makers and business leaders are provided with a tool to assist them in the formulation of improved economic policies and institutional reforms," said Klaus Schwab, founder and executive chairman of the Geneva-based WEF.

Source: Xinhua