There was no ranking in the World Economic Forum’s Global Competitiveness Report 2020, but officials have warned leaders to be more proactive in reviving, transforming and redesigning their economic systems to enhance human development while ensuring environment sustainability.
The special 2020 edition report titled How Countries are Performing on the Road to Recovery, urged countries to take proactive steps to implement transformative policies, “bold investments and new ventures” to ensure economic recovery.
“Such an approach requires courageous vision and a nuanced balance between the short and long-term . . . This unusual moment calls for innovative and much-needed shifts in policy,” the report said, while pointing out that it will require “building blocks of a transformation towards new economic systems that combine productivity, people and planet targets”.
In the World Economic Forum’s Global Competitiveness Report for 2019, Barbados was ranked 77th out of 140 countries, with a competitiveness index score of 58.9.
It is hoped that the report will revert to a benchmarking exercise this year.
However, looking back at last year, the authors of the special 2020 edition pointed out that one of the long-standing issues prior to the COVID-19 pandemic was “the ongoing and consistent erosion of institutions, as shown by declining or stalling checks and balances and transparency indicators”.
They indicated that it was against his backdrop that governments should prioritize improving long-term thinking capacity within governments and enhance mechanisms to deliver public services, including greater digitalization.
“In the transformation phase, governments should work to ensure that public institutions embed strong governance principles and to regain public trust by serving their citizens.
“A second area of concern before the 2020 pandemic was high levels of debt in selected economies as well as widening inequalities. The emergency and stimulus measures have pushed already high public debt to unprecedented levels, while tax bases have continued eroding or shifting.
“To respond to these issues, in the revival phase, the priority should be on preparing support measures for highly indebted low-income countries and plan for future public debt deleveraging,” it explained.
It said: “an increasing public-debt burden presents new challenges for future growth, potential debt sustainability challenges and financial instability, especially in developing countries.
“It also challenges current tax systems and calls for a review of tax structures.
“Further, in countries where trust in institutions is declining, there may be doubts about the efficacy of public spending of the large amounts being mobilized to stabilize the economy in the current crisis,” the report highlighted.
It said in the long run countries should focus on shifting to more “progressive” taxation – rethinking how corporations, wealth and labour are taxed.
“This will require both national reforms and setting an international cooperative framework,” it said.
The World Economic Forum report, which was put together by Founder and Executive Chairman Klaus Schwab and Managing Director Saadia Zahidi, pointed out that despite significant expansions of information and communication technology (ICT) access before the COVID-19 crisis, ICT availability and use remained far from universal.
It said while there has since been some accelerated digitalization in advanced economies, the pandemic has made catching up more difficult for countries or regions that were lagging before the crisis.
To address this, it suggested that countries upgrade their utilities and other infrastructure “as well as close the digital divide within and across countries for both firms and households”.
In relation to human development, the report pointed out that prior to the global health pandemic there were a lot of skills mismatches, talent shortages and increasing misalignment between incentive and rewards for workers, which were flagged as problematic for advancing productivity, prosperity and inclusion.
It noted that as a result of the pandemic and subsequent acceleration of technology adoption, these challenges have become even more pronounced and compounded further by permanent and temporary losses of employment and income.
“To address these issues, countries should focus in the revival phase on gradually transitioning from furlough schemes to new labour market opportunities, scaling up reskilling and upskilling programmes and rethinking active labour market policies.
“In the transformation phase, leaders should work to update education curricula and expand investment in the skills needed for jobs in ‘markets of tomorrow’, and in parallel, rethink labour laws for the new economy and use new talent management technologies to adapt to the new needs of the workforce,” the report recommended.
Countries are also being encouraged to expand health system capacity to manage the dual burden of current pandemic and future healthcare needs, and in the long-term, expand eldercare and childcare.
The report pointed out that in the wake of the COVID-19 crisis and the subsequent, necessary policy responses, debt to gross domestic product (GDP) ratios were expected to surge.
“As some countries entered the health crisis with already high debt levels and slowing growth, fiscal space has partially reduced the size of deficit-spending programmes.
“This has been further exacerbated by shifting and partially shrinking tax bases due to slower growth, profit shifting by multinational firms, and relatively low levels of progressivity in households’ taxation compared to the past,” it said.