Switzerland Topples the U.S. as Most Competitive Economy: WEF Study

Switzerland has knocked the United States off its position as the No. 1 most competitive country in the world as the U.S. banking system crash left the country more exposed to some long-standing weaknesses. A report released by the World Economic Forum showed economies with a large focus on financial services such as the USA, Britain or Iceland were the big losers of the crisis. The US slipped to second place for the first time since the introduction of the index in its current form in 2004. It is important to note that the study found trust Swiss banks have also declined, but in terms of soundness, it ranked 44th. The U.S. fell to 108, right behind Tanzania. Wow. That's a major fall.

The WEF bases its assessment on a range of factors, key for any country to prosper. The index includes economic data such as growth but also health data or the number of internet users. The study also factors in a survey among business leaders, assessing for example the government's efficiency or the flexibility of the labor market.

The WEF applauded Switzerland for its capacity to innovate, sophisticated business culture, effective public services, excellent infrastructure and well-functioning goods markets. The Swiss economy dipped into recession last year, too and had to bail out its largest bank UBS. But its economy is holding up better than many peers and most banks are relatively unscathed by the crisis, which drove U.S. banks into bankruptcy.

The WEF said the U.S. economy was still extremely productive but a number of escalating weaknesses were taking its toll. Concerns were growing about the government's ability to maintain distance to the private sector and doubts rose about the quality of firms' auditing and reporting standards, it said. Source: Reuters

It is interesting to note that the report showed the leading emerging markets Brazil, India and China improved their competitiveness despite the crisis. Of course, that doesn't come as a surprise, especially where China and India are concerned, since they have been the biggest recipients of outsourcing from the U.S.

United States Increases Its Share of Worldwide Arms Market Amid Economic Slump

Business is booming for the United States in the foreign arms market. Even with a faltering economy and a slump in overall global arms sales, according to a Congressional study, the U.S. increased its annual market share to more than two-thirds of all foreign arms deals in 2008. In a nutshell, that means that 68.4 percent of arms trades involve U.S. sales. This is great news in some circles, but not to the millions of Americans who are unemployed.

Topping the list of buyers in the developing world last year were the United Arab Emirates, which signed $9.7 billion in arms deals, Saudi Arabia, which signed $8.7 billion in weapons agreements, and Morocco, with $5.4 billion in arms purchases.

New York Times:

Despite a recession that knocked down global arms sales last year, the United States expanded its role as the world’s leading weapons supplier, increasing its share to more than two-thirds of all foreign armaments deals, according to a new Congressional study.

The United States signed weapons agreements valued at $37.8 billion in 2008, or 68.4 percent of all business in the global arms bazaar, up significantly from American sales of $25.4 billion the year before.

Italy was a distant second, with $3.7 billion in worldwide weapons agreements in 2008, while Russia was third with $3.5 billion in arms sales last year — down considerably from the $10.8 billion in weapons deals signed by Moscow in 2007.

The growth in weapons sales by the United States last year was particularly noticeable against worldwide trends. The value of global arms sales in 2008 was $55.2 billion, a drop of 7.6 percent from 2007 and the lowest total for international weapons agreements since 2005.

The annual report was produced by the nonpartisan Congressional Research Service, a division of the Library of Congress. It is widely regarded as the most detailed collection of unclassified global arms sales data available to the general public. To read more, CLICK HERE.

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