Recurrent clashes between security forces and citizens last year are believed to have caused Egypt to retreat to 94th place in this year's Global Competitive Index (Photo: AL-Ahram)
Egypt fell 13 places to come in 94th in this year’s Global Competitive Index ranking, according to the World Economic Forum.
With an overall score of 3.8 points, Egypt's sub-scores in all categories – including basic requirements, efficiency, innovation and sophisticated factories – fell in this year's ranking.
The global list, which includes 144 countries, was topped by Switzerland for the fourth consecutive year, followed by Singapore in second place and Finland and Sweden in third and fourth places respectively.
According to this year's report, Egypt's downgrade was based on a handful of political factors, including last year's demonstrations and clashes, which, the report states, adversely impacted the country's overall business climate.
The report stresses that Egypt's new leadership will have to address a host of serious economic challenges, beginning with reform of the labour market, which, it asserts, suffers from the inefficient use of available human resources, strict labour regulations and poor relations between labourers and employers.
Encouraging job creation, meanwhile, will also necessitate the stimulation of demand for labour by establishing a framework to allow for more vibrant domestic competition and greater openness to trade and foreign investment.
A longer-term issue that remains to be tackled, the report goes on, is the overhaul of Egypt's educational system, which must gear educational outcomes more strongly toward the needs of the business community to ensure high enrolment rates.
Unlike the case in Tunisia, the report notes, Egypt's macroeconomic situation is less favourable than the country’s other indicators.
In order to provide Egypt’s population with employment opportunities and a degree of prosperity in the coming period, the country will have to be put on a more sustainable growth path, the report concludes. This can only be achieved by resisting pressures against the reform process and focusing on a competitiveness-enhancing agenda that will raise the economy's overall productivity levels.