|
|
 |
|
| Industry |
On the Nordic Track
Augusto Lopez-Claros
04/01/2004
|
Why are some countries able to sustain prolonged periods of buoyant economic
growth and attract foreign capital while others remain stagnant or, worse, see a
steady erosion of living standards? For the last couple of decades the World
Economic Forum has been trying to cast some light on this important question by
producing rankings of countries according to their global competitiveness. The
rankings cover more than 100 countries and are based on a comprehensive opinion
survey of business executives.
The Finnish government does not intervene in ways that divert resources to
unproductive ends. |
Our rankings show that Finland, a top
performer for several years running, is now the most competitive economy in the
world. That might discomfit the United States, which ranked second, followed by
Sweden, Denmark and Taiwan, but the high rankings of the Scandinavian economies
are not surprising to those who have observed their cautious macroeconomic
management and sound fiscal policies. Also, public institutions in Finland
operate with very low levels of corruption, and the country is characterized by
widespread respect for contracts and the rule of law.
Finland’s performance
is impressive in all three of the major indicators that go into our
competitiveness index: the stability of the macroeconomic environment, the
quality of public institutions, and the level of technological readiness. The
country has been running large fiscal surpluses for several years, although it
declined somewhat last year from a 5 percent surplus in 2002 and a prodigious 7
percent in 2000. Government policy is to run fiscal surpluses to create a pool
of savings to finance future pension liabilities associated with the aging of
the population and to take care of other unforeseen contingencies, rather than
financing these needs by increasing the national debt. Indeed, both the Ministry
of Finance and the Bank of Finland have called for a surplus of some 4 percent
of GDP over the period 2004 to 2010.
|
|
|
|
|
|
|
