Russia drops in global competitiveness rankings

Russia slid three positions to 66^th place in the latest annual Global Competitiveness Index rankings released by The World Economic Forum on Wednesday. As such the nation continues to trail the other so-called BRIC nations – Brazil (53^rd up five places), India (51^st down five places) and China (26^th up one place).

Despite seeing an improvement in macroeconomic stability the report pinned Russia’s fall in competitiveness on a deterioration in other areas, “notably the quality of institutions, labor market efficiency, business sophistication, and innovation,” wrote the report. “The lack of progress with respect to the institutional framework is of particular concern, as this area is likely to be among the most significant constraints to Russia’s competitiveness.”

The report once again dusted off the usual list of reforms needed for bettering competiveness, such as the strengthening the rule of law and the protection of property rights, improving the functioning of the judiciary, and raising security levels across the country. Competition, both domestic and foreign, was negatively affected by markets dominated by a few large firms, inefficient anti-monopoly policies, and restrictions on trade and foreign ownership, the report wrote.

Potential strengths that were listed included a particularly high innovation potential, a large and growing market size and a solid performance in higher education and training, although these weren’t deemed as sufficient to overcome other short fallings.

Experts were not surprised at the findings. “All the programs which were developed to improve competitiveness don’t influence the roots of the problem, they simply airbrush over them,” said the president of Delovaya Rossiya, Alexander Galushka, in a report on gazeta.ru.

“Why should our position suddenly have improved? From the point of view of innovative potential there has been nothing but loud statements about lamps and tablets, which we would be hard pressed to say were made in Russia. Besides this we have nothing. In terms of international export structures we also lose out,” gazeta.ru quoted the director of the strategic analysis department at FBK, Igor Nikolayev, as saying.

Together with fellow BRIC nation Brazil, Russia did, however, manage to move up in one set of rankings. It jumped up in the five stage “List of countries/economies at each stage of development” table from out of the “stage 2 efficiency-driven economies” into the “transition to innovation-driven stage economies” group, which was largely due to an increase in Russia GDP per person ringing.