Global competitiveness explains the business relationship between 144 competing countries around the world, broken up into regional sections. How a country thrives economically depends on their productivity and their prosperity. In order to thrive in these two different ways a country must assess their economics according to their government, business, their civil society, macroeconomics, health, education, and infrastructure, a few of 12 factors used to comprise the global competitiveness report. In short, the level of productivity within these venues, and set within these 144 countries defines that country’s level of prosperity. This essay will compare and contrast such prosperity between Singapore and Kenya.
Kenya’s global competitiveness business ranking is 90 out of 144 in 2014. This is up six points from the previous year. Comparably, Singapore is 2nd on that list, outranking all 144 countries excepting Switzerland. Kenya’s move from 96 to 90 was due in large part to Kenyan labor market efficiency leader which “tests the country’s investor protection positioning…Kenya…is now ranked at position 25” (Kangethe, 2014, para. 5). Kenya’s economy has enhanced because of their financial markets that have become more well-developed according and comparably to international standards (Kangethe, 2014, para. 6). Singapore’s ranking has much to do with its infrastructure, health and education, technological readiness, goods and labour market efficiency, as well as financial market development (Yahya, 2014, para. 4); as the World Economic Forum states, “Singapore possesses world-class infrastructure, with excellent roads, ports and air transport facilities” (Yahya, 2014, para. 5). Unlike Kenya, Singapore can “rely on a sound macroeconomic environment and fiscal management – its budget surplus amounted to 6.9 percent of GDP (gross domestic product in 2013)” (Yahya, 2014, para. 6). Kenya, on the other hand, despite its leap from 96th to 90th and its innovation in its educational system as well as its “high company spending on Research and Development (R&D) and good scientific research institutes that collaborate well with the business sector in research activities” (Kangethe, 2014, para. 10-11) but its competitive ranking slipped after the 2012 election crisis.
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Kenya’s boom in jumping 6 percent up on the global competitiveness scale can be attributed not just to the aforementioned factors but to their efforts in both private and public sector efforts. These efforts can be seen in the “infrastructure growth” and will dramatically help Kenya’s ranking “of on-going flagship projects” (Kangethe, 2014, para. 13). Singapore can also rely on the bridge between private and public sector as the former is “becoming increasingly sophisticated and more innovative” (Yahya, 2014, para. 8) but still has more room to grow and improve, much like Kenya. Singapore’s business sector “offers excellent on-the-job training opportunities, both citizens and private companies that are proactive at adapting the latest technologies, and labor markets that balance employee protection with business efficiency” (Yahya, 2014, para. 9).
For both companies, government productivity seems to be the key in pushing for the on the global competitiveness scale. As such efforts that are needed to narrow the gap that could further improve social mobility/security, and in Kenya in particular, government improvements such as “new constitution, construction of the Standard Gauge Railway line, JKIA Terminal Four, LAPSSET, Energy Infrastructure capabilities, Galana-Kulabu Irrigation scheme and related modernization at the Port of Mombasa” Kangethe, 2014, para. 17) will help to improve their global competitiveness ranking for next year.
Another factor that puts Kenya so far down on the global competitiveness scale is their supreme lack of security which pales in the face of better equipped countries such as the United States, Switzerland and Singapore (Kenya ranked at 128 in this area on the global competitiveness scale) Kangethe, 2014, para. 18). Singapore, despite holding second place must also look out in the upcoming year, as it’s ranking has a high chance of slipping; “giving businesses access to the resources that they need will still be the main challenge going forward…the risk of a policy misstep from a further tightening of labour policy could cause businesses to change their minds about Singapore” (Yahya, 2014, para. 7).
The Foreign Direct Investment (FDI) and competitiveness link between these countries can be seen with Singpore being a rising star on the scale compared to Kenya. Kenya’s security ranking disallows for business to feel secure in investing while Singapore’s second place ranking for the fourth consecutive year speaks to their lack of security issues in their country. Singapore has risen on the global competitiveness scale because of their FDI, which may be largely attributed to the country coming out of an 80 year crisis (Yahya, 2014, para. 9). It seems that FDI may directly relate to a country’s competitiveness as Switzerland can attest. Switzerland’s FDI in foreign trade, investment and business practices has made the country top the charts due in large part to their lack of barriers in business, that can be summed up in one word: noninterference. Kenya’s government’s rules and regulations on business practices, taxes, and lack of security, are all indicators to the country’s poor ranking. Singapore, however, is following Switzerland’s lead in FDI.
- Kangethe, K. (2014). Kenya’s global competitiveness index ranking improves. Business and Tech. Retrieved from http://www.capitalfm.co.ke/business/2014/09/kenyas-global-
competitiveness-index-ranking-improves/ - Schwab, K. (2012). The Global Competitiveness Report 2012–2013. World Economic Forum Retrieved from: http://www.weforum.org/issues/global-competitiveness
- Yahya, Y. (2014). Singapore retains spot as second-most competitive economy. The Straits Times. Retrieved from http://www.straitstimes.com/news/business/economy/story/singapore-
retains-spot-second-most-competitive-economy-20140904
