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Irish Independent
30-07-2025
- Business
- Irish Independent
Competitiveness Council sees echoes of Celtic Tiger bust in waning economic energy
The warning is contained in a bulletin issued in response to the IMD World Competitiveness Rankings for 2025, in which Ireland slipped from 4th to 7th place globally. As recently as 2023 Ireland ranked as the second most competitive economy. The NCPC says the slide is a sign of a loss of competitiveness in the Irish economy that echoes trends seen at the start of the 2000s. While Ireland retains a highly competitive position globally, the NCPC says the trend is concerning. "It is clear, however, that our ranking is trending downwards. More importantly, there is no reason to expect a significant, near-term improvement in many of the factors that are currently weighing on our competitiveness (ie basic infrastructure, the cost of living, indigenous energy production, listed domestic companies, etc.),' the NCPC warns. It says that headline economic metrics such as tax receipts and the numbers at work remain strong, but there are other signs of a potential softening in the economy. "The current downward trajectory in Ireland's international competitiveness is one such sign, but this is not occurring in isolation. Rather, this is happening in tandem with an ongoing rise in the incidence of insolvencies and a slowdown in the rate of FDI projects being won by Ireland. Indeed, the Celtic Tiger era may prove to be instructive in this regard, albeit we cannot know from this remove,' the bulletin warns. Ireland attained a global competitiveness ranking of 5th in 2000, the NCPC says, but almost immediately a period of extended deterioration set in. By 2004, Ireland had fallen to 10th and by 2011 it was ranked just 24th out of 69 countries surveyed, after a fall was recorded in five out of seven years. The International Institute for Management Development's (IMD) World Competitiveness Centre has been publishing its rankings of the competitiveness of countries for 37 years. It now assesses 69 economies based on their ability to create and maintain a competitive business environment, taking in more than 262 indicators grouped across four pillars: Economic Performance, Government Efficiency, Business Efficiency, and Infrastructure. Its competitive metrics are based on a mixture of quantitative and qualitative data. In this year's rankings, Switzerland reclaimed the top spot, moving up one place to overtake Singapore. Both are high-cost economies with strong quality of life outcomes. Ireland remains one of the most competitive economies in the EU and has been placed in the Top 20 most competitive economies globally since 2012. The NCPC says competitive traits which Ireland has developed – including its skilled workforce, business-friendly environment and strong institutions – continue to be strengths. However major weaknesses now include the quality of infrastructure – where we place just 44 out of 69 countries assessed. The NCPC, chaired by Prof Frances Ruane, says the upcoming Action Plan of Competitiveness and Productivity will seek to address these weakness while continuing to maintain our strengths.
IOL News
24-06-2025
- Business
- IOL News
SA's competitiveness ranking languishes at 64 out of 69 countries
South Africa has ranked 64th out of 69 countries in the IMD World Competitiveness Rankings for 2025. Image: Independent Newspapers Archives South Africa has ranked 64th out of 69 countries in the IMD World Competitiveness Rankings for 2025, highlighting ongoing challenges with governance, infrastructure, and job creation. According to the report, South Africa continues to struggle with high unemployment rates and lack of employment opportunities, as well as corruption and poor government effectiveness. The report also cites poorly located and inadequate infrastructure that limits social inclusion and economic growth, along with rising public debt levels amid a shrinking fiscal space as key challenges. This is the lowest ranking for South Africa since 2021. Reacting to the ranking, economist Dawie Roodt said the core issue is not economic but political. 'The main reason behind all of this is an ineffective government, a corrupt government with the wrong ideologies and policies. So the reason why we keep on slipping is because, let's call it by name, is because of the ANC,' he said. He added that the biggest barrier to investment is 'a lack of confidence in the South African government, a lack of confidence in South Africa's economic future.' On balancing developmental policies with investor confidence, Roodt said, 'That's the wrong approach. It's not the one or the other, it's both combined. By developing the economy, you will also address some other social imbalances.' Economics professor Waldo Krugell, from the North-West University, also said sentiment plays a key role. 'There was a lot of optimism when the GNU (Government of National Unity) initiated last year, but a lot of that momentum has been lost,' he said. 'When it comes to sentiment, that's where we're struggling at the moment; the reform process is too slow.' Krugell said regulatory reform is critical. 'You can make these regulatory reforms without increasing taxes or increasing borrowing. When it's easier and cheaper to do business, we should see a boost in confidence, followed by increased investment, and ultimately growth and job creation.' He said: 'The biggest barrier at this stage to attracting more domestic and foreign investment is the cost of doing business,' and that policy uncertainty was also a significant problem. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading Professor Bonke Dumisa, an independent economic analyst, said South Africa's poor competitiveness ranking is largely due to 'no political will for those who are in political power to make sure that the economy grows faster than the population growth rate.' He criticised regulatory reform efforts as being compromised by 'politicians and bureaucrats who are involved in the issuing of those licenses.' Dumisa added that many domestic investors are 'on strike' and unwilling to reinvest locally, choosing instead to send profits abroad, which worsens inequality. 'They want to make lots of money with very little compliance and send it abroad, without the South African economy benefiting from that.' He stressed that meaningful reform must go beyond 'big words used by politicians' and must deliver transparent, inclusive economic growth. DA MP and party spokesperson on Trade, Industry & Competition Toby Chance said South Africa's competitiveness crisis 'demands urgent regulatory reform.' He said policies like the Employment Equity Amendment Act, Expropriation Act, and BBBEE Act are 'anti-growth' and argued that 'this economy must grow for jobs to be created.' 'The Organisation for Economic Co-operation and Development, in its latest report on SA, finds our regulatory environment is the most restrictive of the countries surveyed.' He added that the Department of Trade, Industry and Competition is expected to table an Omnibus Bill that aims to reform multiple economic laws. 'This bill, to be effective, must reduce red tape and the legislative and regulatory impediments in these laws that undermine competitiveness and add to the cost of doing business,' Chance said. THE MERCURY
