A high crime rate, unreliable electricity supply and inflexible labour laws saw South Africa drop six places over two years on a global economic competitiveness barometer released on Wednesday.
Ranked 46th overall out of 128 countries measured, South Africa was the second-best performer on the continent and the best among countries south of the Sahara, according to the 2007 Africa Competitiveness Report compiled by the World Economic Forum (WEF), World Bank and African Development Bank.
“South Africa is sub-Saharan Africa’s economic giant, accounting for a third of its GDP [gross domestic product] despite accounting for only 6% of its population,” said the report released on the first day of an annual WEF on Africa meeting in Cape Town.
The country scored well in terms of property rights, corporate ethics, business sophistication and scientific innovation.
But obstacles to competitiveness included the country’s high crime rate, with one of the world’s highest murder statistics.
“The business cost of crime and violence (116th on the ranking) and the unreliability of police services to protect from crime (92nd) are highlighted as particular concerns,” said the report.
Another obstacle was inflexible labour laws, said the document released as striking public servants marched past the conference venue in the second week of mass protests over a pay dispute with the government.
“The country ranks 126th in labour-market flexibility, encompassing hiring and firing practices, flexibility of wage determination and union-employer relations,” it stated.
The situation was worsened by a short supply of skilled labour.
The report said South Africa’s ranking for tertiary education and training dropped to 57 from 47 last year. Not enough skilled workers were being produced for the needs of a modern economy.
“Infrastructure represents another challenge,” read the document. The country dropped from last year’s 35th spot to 50, with particular concern over the quality of electricity supplies recently plagued by interruptions.
But South Africa also did well in a number of areas typically the domain of rich, innovation-driven economies, said the report. — AFP