Press Release

Nótese la fecha (26 de septiembre)

SHARP DROP IN ARGENTINA’S RANKING IN THE WORLD ECONOMIC FORUM’S 2006 GLOBAL COMPETITIVENESS INDEX

Switzerland, Finland and Sweden take the lead, but US drops

Geneva, Switzerland 26 September 2006 – Argentina drops sharply to 69th position in the World Economic Forum’s Global Competitiveness Index (GCI) rankings for 2006-07 behind Brazil (66), Mexico (58) and Chile (27). Argentina’s competitiveness ranking has come under pressure as a result of some deterioration in a number of indicators which capture aspects of the institutional environment. The Forum data shows that the business community has serious concerns about the property rights environment, the independence of the judiciary, wastefulness in the use of public resources, the lack of even-handedness in the government’s relations with the private sector, and see public officials as not being sufficiently impartial in their dealings. In addition, the country is burdened with high levels of public sector debt and various market inefficiencies–particularly intense in the labour market–which suggest a deterioration in the quality of the investment climate.

“To escape the decades-long cycle of boom and bust, Argentina will have to institutionalize its fiscal policy, aim for a structural surplus of at least 1 % of GDP, and imbed this in a new law. This would be a sound way to build on the progress made in recent years in changing the pattern of fiscal ill-discipline. But it will not be enough. The authorities will also have to improve the business climate, anchoring it in a framework of predictability, transparency, free from heavy-handed, often ill-conceived, government intervention. There is no intrinsic reason why Argentina can not continue to grow at 6–8 % per year for the foreseeable future, provided efforts are made to establish a sound policy framework,” said Augusto Lopez-Claros, Chief Economist and Head of the World Economic Forum’s Global Competitiveness Network.